Being a Fund Manager is seen as one of the most glamorous roles in the finance industry. He is the person in charge of managing the entire Mutual fund’s investments and ensuring that it is in alignment with the larger goals.
The sense of power, success and the media coverage has lured many young graduates to this role. But behind all this glitz lies the huge responsibility of constantly creating wealth for others. Needless to say, the efforts needed are also huge.
Preparing yourself for a role of this stature will require huge determination and dedication and starting early is the only way to do it. So here’s how 10 practical steps can help a graduate become a successful Fund Manager.
- Fund Manager – Is that what you see yourself as?
Time for some introspection! Ask yourself why you want to be a Fund Manager. 1. Is it the glamour and the money? Or 2. Is it your undying passion for the financial world? Unfortunately, if the answer is inclined towards number 1. your journey will be short-lived. But if your answer is the latter, you’re sure to make progress. Being a Fund Manager is no mean feat. It involves arduous working days, erratic schedule, constant learning, immense agility plus loads of patience when things do not go your way. So step into it only if you are mentally prepared for it.
- Read! Read! Read!
This can’t be emphasized more. The global and domestic financial market is ever changing. You need to stay abreast with the latest developments not only in economy but also in the technology and political world. Subscribe to well-known dailies like Economic Times, Mint, the Economist, the Financial Times, Bloomberg etc. Try to understand how each development – political or in technological can have a domino effect across the interdependent spheres. Research on the internet on successful business models and stories of the companies such as FlipKart, Patanjali, Amazon, Facebook, McDonalds etc. and develop an analytical mindset.
When it comes to reading, lack of time is the biggest excuse we all make. Shun this notion and use your travel and waiting time in various queues to catch up on reading. You will realize its worth in the long run.
- Track and follow the industry
After you have got into the habit of regular reading, try to focus more on the investing world. Track the stock market movements. Learn how an Asset Management Company fundamentally works. Subscribe to the publications and newsletters of mutual fund focused websites like Value Research, Money Control, Fundsindia.com, Café Mutual etc.
- Networking through LinkedIn or other events, seminars, investor conferences, etc.
LinkedIn is a blessing for networking with like-minded professionals. You can connect with various fund managers of big AMCs like Mirae, Franklin Templeton, DSP Blackrock, HDFC etc and track their investment management philosophies. Also, you can connect with other analysts working with leading mutual fund houses and try to understand the ropes of the trade. It may take some time to connect with them but you need to make consistent efforts.
Another great idea is to attend trade fairs, expos and investor conferences to increase awareness about the asset management industry and personally interact with them. SEBI and CII organize many such events. Eg. Finbridge- A financial services and technology expo is very popular and draws huge crowd.
Now, is the time to get your hands dirty? Gaining knowledge as an outsider can give you a good understanding but nothing equates personal experience. As a fresher, you can opt for various internships in equity research or fund houses to get exposure in the real world. This is something that you can do alongside your study or in vacations. Today there are various websites like internshala.com, Twenty19.com, hellointern.com and Intern World where you can find various opportunities in the field of business, investing and finance.
- Polish your niche
The investing world is huge. Now that you have read quite a lot on investment and funds and got an internship, you know that each fund manager handles a different kind of fund has a different philosophy and style of investing. There is small cap, mid cap, large cap fund, funds for emerging markets, balanced funds, sectoral funds, pure equity funds etc. You can pick one or more areas or style of your choice and try to increase your knowledge on this. Specialized knowledge will add to your confidence and give you an edge over others.
- Participate in simulated Portfolio Management games
There are many simulated games on Portfolio Management available on the internet. Pick few of these from authentic sources like Investopedia, Market Watch, Fitch Learning etc. and start participating. Such games add a dash of fun and excitement while helping you to understand the basics of asset allocation, principles of diversification, liquidity and other issues in the secondary market.
- Enroll for CFA/ MBA Finance
Gradually you have to take more serious steps to become a Fund Manager. The first and the foremost is opting for a CFA or MBA (Finance) from a tier I institute. Portfolio Management is an integral module in the CFA exams and you will get to learn from real world situations and case studies. Moreover, a global certification like CFA is sure to make you stand out.
- Learn Financial Modeling
Funds which invest in equities tend to pick stocks with attractive valuations. You cannot understand valuation if you do not know the art of forecasting. For this it is advisable that you learn financial modelling from a reputed institute. Financial modeling is one of the must have skills for a Fund Manager. If you start early you will get time to practice on various projects and gain confidence.
- Find an entry level job as an analyst
Finally, it is time to take the plunge. Nobody becomes a fund manager overnight. It takes years of experience and rich knowledge base. The first role as an aspirant is a mutual fund analyst. As an analyst, you will diligently monitor your positions on one or more funds, and update your models/investment thesis accordingly to any new development/ information. Once you are proficient in analyzing funds, you will graduate to be a fund manager, where you have to hedge the broader downside risks of a portfolio.
The journey to becoming a Fund Manager is indeed challenging but definitely not impossible. So, get set and start your journey now. Search for the most authentic resources and steer your orientation towards the world of investing!