Before diving into every minute detail, let us understand a bit about it and get a brief overview. A portfolio manager is a financial professional who is responsible for a client’s investment portfolio, typically with the goal of achieving a specific investment objective, for example, getting steady and consistent ROI ( Return on Investment). This may involve making investment decisions, monitoring performance, and adjusting the portfolio if needed. It also works on specific directions suggested by a client and adjusts the risks according to that client’s risk appetite. This whole process is known as Portfolio Management. A portfolio may also include various kinds of investments such as mutual funds, bonds, cryptos, stocks, etc
Must Read– What is Portfolio Management?
This Blog Includes:
- Portfolio Manager: Overview
- Roles and Responsibilities
- Types of Portfolio Managers
- Benefits of Becoming a Portfolio Manager
- How to Become a Portfolio Manager
- Skills Required
- Top 5 Colleges for Portfolio Management in India
- Duration to Become a Portfolio Manager
- Salaries and Top Recruiters
- Job Outlook
Portfolio Manager: Overview
To get a short overview, a portfolio manager oversees and manages an investment portfolio on behalf of a firm or clients. As this may involve a lumpsum amount of money, the manager needs to take wise decisions while investing as a small mistake from their side can eventually wipe out the whole amount of investment. So a portfolio manager needs to be very careful with their investment choices and only invest with technical strategies and execute the plan with precisely calculated risks. A portfolio manager also needs to do daily trading on behalf of the client or firm only if asked to do so.
Roles and Responsibilities
There are certain responsibilities that a portfolio manager needs to take care of to maintain a healthy relationship which their client. Communication is also very important in understanding a client’s investment goal and risk tolerance which is a crucial responsibility for this job profile. So here are the key roles and responsibilities:
- Maximizing returns while minimizing risk for the client by taking calculated risks
- Diversifying a client’s portfolio by Investing in different kinds of assets, selling highly risky assets and investing in new opportunities which retain the perfect balance of a portfolio
- Staying up to date on industry standards, news, and regulatory changes which might affect a client’s investment
- Monitoring and evaluating a client’s investments and planning and executing perfect entry and exit strategies for different assets
- Developing and implementing investment strategies for the client to achieve their financial goal
- Staying up-to-date about the market trends using economic indicators and proper technical analysis and chat patterns to understand the potential investment opportunities
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Types of Portfolio Managers
There are several types of portfolio managers, each with different responsible and unique strategies:
- Active Portfolio Manager– An active portfolio manager uses their market knowledge and research to select stocks, cryptos or any other asset that they believe will outperform the market.
- Passive Portfolio Manager– A passive portfolio manager seeks to replicate the performance of a specific market index, such as NIFTY50, BANKNIFTY, or FINNIFTY and diversity the portfolio according to the market index
- Private Wealth Portfolio Manager– This kind of manager only works with high-net-worth clients, creating personalized investment strategies tailored to achieve the client’s desired financial goal.
Benefits of Becoming a Portfolio Manager
There are numerous benefits of Portfolio management as you always push your boundaries to deliver the best for your clients by always staying up to date about new policies and new potential investment opportunities available in the market which in return will help you in your personal finance and planning on how to grow your own wealth. Here are some key benefits which are highlighted below:
- Opportunity to work with high net worth clients and manage large investment portfolios
- As you start working with high net worth clients and deliver the best and optimal service, it in return also helps you in building healthy relationships and in return helps build a network for you gradually
- High earning potential
- Skill development like active listening, and critical thinking will help you in being more analytical and survive complex financial situations
- Working in a fast-paced industry and constantly changing market will help you to work dynamically
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How to Become a Portfolio Manager
Usually, it takes a lot of practical experience to gain knowledge about portfolio management,
So let us get to know about the academic requirements and certification:
Step 1- Bachelor’s degree relevant to finance
It’s necessary as a just step towards this particular profession to earn a bachelor’s degree with a major in finance which can be related to accounting and business. Some of the relevant courses are:
- Data analysis
- Business Law
- Tax Law
- Asset and Risk management
Step 2- Graduate degree in Finance
After completing your bachelor’s degree you need to enrol yourself on a master’s degree in finance. Some relevant courses are:
- Master of Bussiness Administration
- Master in Asset Management
- Master in Accounting and Finance
- Master Financial Analysis and Fund Management
Step 3- Gaining Experience in this Field
Even after you get the necessary degrees with practical life experience you cannot stand a chance against the other competitors out there in the market. You need to expand your knowledge further by understanding proper budgeting, business valuation, financial modelling, etc. and also need to know about some basic technical analysis like chart patterns, support and resistance, bear and bull behaviour and so on. For testing and implementing your knowledge, you can try using the Paper Trading method.
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Step 4- Earning Certifications and Licenses
For Becoming a trustable portfolio manager it requires some certifications and licences
You will get these certifications if you followed the steps mentioned earlier and get good aggregate scores in the exams conducted
Some of the certifications are listed below:
- Chartered Financial Analyst (CFA)
- Chartered Portfolio Manager (CPM)
- Licence by Financial Industry Regulatory Authority (FINRA) which is U.S based broker and security firm
- Registered with U.S Securities and Exchange Commission (SEC)
- Registered and License by the Securities and Exchange Board of India (SEBI)
A few qualities and skills that will help you in becoming a successful Portfolio Manager are:
- Strategic Thinking
- Critical Thinking
- Analytical Skills
- Active Listening
- Understanding Market Behaviour
- Solution Driven Approch
- Unbiased Decision Making
- Disaster Management
- Communication Skills
- Risk Management
- Research Skills
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Top 5 Colleges for Portfolio Management in India
Here are the top 5 colleges in India for Portfolio Management:
|Indian Institute of Foreign Trade (New Delhi)||INR 22 Lakh|
|Institute of Chartered Financial Analyst of India (Hyderabad)||INR 9 Lakh|
|Indian Institute of Management (Indore)||INR 3 Lakh|
|Mudra Institute of Communications (Ahmedabad)||INR 21 Lakh|
|Indian School of Bussiness (Hyderabad)||INR 39 Lakh|
*Please note, these are estimated Average fees and this may vary depending on which program you want to enrol yourself in.*
Duration to Become a Portfolio Manager
The duration to complete a portfolio manager course varies depending on the program. Let us understand this with an example CFA (Chartered Financial Analyst) takes around 1.5 to 4 years and this time varies depending on an individual’s academic background and technical skills, whereas obtaining a license or a certificate may take only a few months. Regardless of the duration, there is no precise duration to become a successful portfolio manager it completely depends on the experience of managing assets, diversified knowledge of all kinds of markets around the globe, and constant staying up to date about the geopolitical situation.
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Salaries and Top Recruiters
We are listing below a few hiring companies that are actively recruiting. Kindly have a look:
|HDFC Bank/ Mutual Funds||INR 13 – 18 Lakh|
|Axis Bank/ Mutual Funds||INR 8 – 11 Lakh|
|JP Morgan||INR 7 – 11 Lakh|
|ICIC Bank/ Mutual Funds||INR 4 – 16 Lakh|
|Reliance Capital||INR 4 – 7 Lakh|
Due to the constant economic growth and new startups and financial products emerging daily, it is anticipated that the employment for all financial analysts which also includes portfolio managers is to increase by 6% between the year 2020-2030. And due to the globalization of dealing securities and assets digitally and also due to the crypto market booming this percentage may get fueled up further in the coming years.
Ans. The basic difference is, a Portfolio Manager makes day-to-day trading decisions and keeps managing the risks whereas a Financial Advisor makes recommendations to buy certain assets according to a person’s risk appetite or financial goals.
Ans. A mutual fund is an investment instrument many investors use to buy securities such as stocks, bonds or other assets. And the main goal is to get a great Return on Investment.
Ans. Portfolio management is the process of building and maintaining a diverse collection of investments with the main goal of achieving a specific financial objective.
This was everything related to how someone can become of Portfolio Manager in India.
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