A Portfolio Manager does not work in sales, unlike Sales Traders and Structurers. Instead, a Portfolio Manager works directly for clients, buying financial products. Clients (either individuals, associations or companies) entrust the Portfolio Manager with the management of their funds, and the manager then has the freedom to invest these funds, while respecting client’s wishes. In turn, Portfolio Managers assume responsibility for losses, in the event of making unwise investment decisions. In order to get the best returns possible, they must study the market and make educated macro-economic projections to find the most attractive positions for their client’s assets. In addition, they must analyze time scales to determine whether to put their client’s portfolios into long or short-term investments.
The individual roles of Portfolio Managers depend on the company where they work. In smaller companies, they must play the role of a Trader and invest funds themselves, according to market direction. In larger portfolio management companies, they would be responsible for relaying instructions to the negotiation table and to Traders, who would then be in charge of passing on orders.
A Portfolio Manager generally begins in a commerce or engineering school, following in the example of a Trader or Sales Trader. By the end of their schooling, Portfolio Managers possess technical trading skills as well as some practical, concrete experience, such as an internship. However, the function of a Portfolio Manager differentiates from a Trader in that Portfolio Managers have a deeper understanding of the legal aspects of the sale of financial products.
The CIT trains its students to become Portfolio Managers by giving them both theoretical training and practice in a trading room, as well as providing them with an opportunity to network with North American and European trading groups, so that they may later use their contacts in their professional careers. Even so, further training in commercial or legal work is recommended for those who wish to specialize in this profession.
Portfolio Manager’s wages are generally high; similarly to a Trader, a Portfolio Manager is by definition a risk taker, and is at the front lines of decision-making. A junior manager makes an average of 50,000 Euros per year, and once having reached a senior position, a Portfolio Manager can make over 150,000 Euros annually. To these salaries, you add bonuses based on the system of a Trader, which compensate according to performance.