Who is a Mutual Fund Analyst and where do they work?

A mutual fund analyst tracks the debt and equity market to assess the performance of the various mutual fund schemes and gives recommendation based on sound judgement. He assists a Fund Manager through research and market analysis so that the latter can make best investment decisions for the clients.

What does it Take to be a Mutual Fund Analyst?

Most of the mutual fund analysts are employed in Asset Management Companies (Fund Houses) and work as a part of big research teams. Alternatively, Wealth management companies also have Mutual Fund Analysts who can give independent advice on the performance of mutual funds. There are also various mutual Fund research portals such as Value Research online and Cafemutual, which have experienced independent Mutual Fund Analysts on board.

Top 10 responsibilities of a Mutual Fund Analyst

Being a Mutual Fund Analyst comes with a huge set of responsibilities. Investors look upto the analyst for unbiased opinion on the performance of various funds. The 10 most important duties of a Mutual Fund Analyst are:

  1. Monitoring movement in Net Asset Values (NAV) for large funds and reviewing the reason for changes.
  2. Analysis of Mutual Fund scheme rankings, researching other funds/schemes available,
  3. Writing reports and articles about the performance of funds and other educational whitepapers for investors.
  4. Working on fund valuation reports.
  5. Recommend the right mutual funds to prospective investors, in-tune with the company’s investment policies.
  6. Reading extensively and keeping yourself updated with latest market trends to have a thorough grip on the investment climate, both global and domestic.
  7. Co-ordinating with research team to come up with the best investment advice for prospective clients.
  8. Supporting and liasoning with global fund service providers
  9. Reconciliation of holdings with respect to organisation data and that of fund accountants.
  10. Studying the risk element, volatility profile and scenario dependencies of the various schemes.

What are the educational qualifications required to be a Mutual Fund Analyst?

Mutual Fund is a niche sector, hence the analyst requires a great degree of specialization. For an entry level analyst, it is best to have an MBA Finance. Though fresh graduates also join as junior analysts in some organisations, an MBA is a ticket to entry in some of the big fund houses.

Mutual Fund analysis involves a lot of calculations, thus a strong accounting knowledge is a must. If you are eyeing renowned fund houses with a fatter pay package and a better profile, MBA with Chartered Accountancy is what you need.

Once you have gained substantial experience as a Mutual Fund analyst, you would definitely look at being a Fund Manager. The level of expertise required for being a Fund Manager is high. You must therefore add specific courses for investment and financial planning, such as a CFA or a CFP to your profile.

Do Skills matter? 

An array of degrees and certificates alone cannot guarantee your success as a Mutual Fund Analyst. It can sure be your entry ticket but in order to excel at your job, you need diverse skills.

1. Strong accounting expertise:

As a Mutual Fund analyst, you will need to go through financial statements of various companies as well as historic fund performance sheet regularly. Ratio Analysis, common size statements and reconciliations will form a part of your daily responsibilities. A well-formed base in accounting will allow you to perform these duties effortlessly.

2. Financial Modeling and Valuation and advanced excel:

An analyst is incomplete if he doesn’t have the acumen to predict the future. Mutual Funds means investment across sectors and assets. Hence, you require strong Financial Modeling and Valuation skills to understand the future performance of the companies. You cannot perform analysis of companies and modelling their upcoming result without a substantial grip on advanced excel techniques. These techniques not only ease your work, but also helps you to derive accurate results in the shortest possible time.

3. Being well-versed with all asset classes

A Mutual Fund Analyst has to monitor all asset classes, and not just equities. You must be able to handle assets like equities, debt, money market securities, precious metals and real estate like a pro. Thorough knowledge of capital markets, regular reading and a few years of experience is sure to make you an expert in every asset class.

4. Communication skills

Being an analyst is not an isolated role. You need to do a lot of interaction with the company, research team, Fund Manager, prospective clients, financial advisors, marketing executives, etc. Not just this, you may have to write several reports and articles to put across the investment rationale and recommendation. Without strong written and verbal communication skills, it will be difficult to do justice to all these responsibilities.

5. Risk Management skills

For a Mutual Fund Analyst, good risk management skills should be paramount. After all clients depend on your assessment of the risks and make crucial investment decisions. You should be able to conduct due diligence and read in between lines of the Red Herring prospectus and offer documents. You must also possess the acumen to identify risk beforehand and convey the same to the clients.

6. Numeric abilities and eye for details

It is evident that a major part of your job would entail reading financial statements, deciphering graphs/charts and transcripts. A superior ability to deal with numbers and an eye for detail is a must for Mutual Fund Analysts. The fund house might incur massive amount of loss if the finer details are missed out. Thus, to be a success in this field, you need to cultivate a passion for numbers and a detail-oriented approach.

Opportunities are huge, make the most of it

Mutual Fund is a very specialized segment of investment and the industry shows great promise in India. So hone your skills, get the right qualifications and prepare yourself for a rewarding career ahead.

As per Simplyhired.com, a Mutual Fund Analyst in India with more than 5-6 years of experience can draw Rs 12-Rs 15 lakhs per annum. After a period of 10-12 years, you can aim to be a Fund Manager, one of the most coveted profiles in the investment industry. However, you need to pick up a lot more expertise till you get there. So, make the most of this opportunity and chalk out a career strategy to carve your niche in the Mutual Fund industry.

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