What Do Portfolio Managers Do

Alyssa OmandacCareer, Overview

Salary, Job Description, How To Become One, and Quiz

A Portfolio Manager is a person responsible for managing the investments in a mutual fund or exchange-traded fund (ETF). Portfolio Managers work with analysts to carry out the investment strategy of the fund. 

Portfolio Managers frequently complete trades, buying and selling stocks or securities to increase the value of a fund. As Portfolio Managers are responsible for managing millions of dollars for thousands of investors, this job requires extensive experience.

Portfolio Managers often start as Research Analysts, helping experienced Managers review the market and detect trends. 




Portfolio Managers

Portfolio Managers manage the portfolios of investment funds. This may include mutual funds, exchange-traded funds (ETFs), or money market funds.

Salary: $102300
Salary Rank: A
Education: Bachelor's degree
Suitable Personality: The Leader

Find a job you love and you will never work a day in your life.Confucius


What they do

Portfolio Managers manage the portfolios of investment funds. This may include mutual funds, exchange-traded funds (ETFs), or money market funds.

Check the Status of Financial Markets Each Day

As Portfolio Managers are responsible for increasing the value of a fund, they need to remain aware of any issues that may impact the performance of the funds that they manage. Portfolio Managers frequently check the status of financial markets, the economy, and factors that influence the markets.

US stock markets trade throughout the weekdays. However, events and developments that occur during the weekend can still influence the markets at the start of the week. Portfolio Managers must anticipate changes to the market before they have a significant impact on the funds that they manage.

Review Market Trends and Developments with Analysts

Portfolio Managers receive help in reviewing market trends and developments. They typically work with a team of Research Analysts, which is also a common entry-level position for aspiring Portfolio Managers.

Research Analysts pay attention to new developments and analyze their potential impact on the markets. For example, after a negative job forecast, Research Analysts may need to determine which types of stocks are most likely to be affected.

Portfolio Managers review the information obtained by Research Analysts to remain aware of all potential changes in the market. Analysts may also provide recommendations on which stocks and bonds to buy or sell.

Direct All Trades for Investment Funds

Based on the input obtained from Research Analysts, Portfolio Managers direct trades for investment funds. The Portfolio Manager has the final say on buying or selling securities. However, the trades that they make must align with the intended goals of the fund.

Each fund has a prospectus, which includes the financial goals and the distribution of the portfolio. For example, an ETF that tracks the biggest utility companies may need to maintain a specific ratio of investment in the top utility companies.

Attempt to Attract New Investors to the Fund

Portfolio Managers frequently meet with potential investors to grow the size of the fund. Portfolio Managers may discuss funds with investors in person or over the phone. With additional investors, the Portfolio Manager has more money available for carrying out specific investment strategies.

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What is the job like

Pros

You May Help People Make More Money

The goal of the Portfolio Manager is to increase the size of the funds that they manage, which can be quite rewarding.

You May Make Money for Yourself

With intimate knowledge of the financial markets, Portfolio Managers are better equipped to increase the size of their own investments.

You Receive Advice From a Team of Analysts

Portfolio Managers decide which stocks and bonds to trade and sell but receive advice from skilled Analysts.

You May Appear on National Television

Experienced Portfolio Managers are occasionally interviewed by news organizations to discuss the economy and financial markets, giving you the chance to appear on national television.

Cons

You Are Responsible for Millions of Dollars

Portfolio Managers often manage multi-million-dollar portfolios, which can increase the pressure of the job.

You Receive the Blame When a Fund Underperforms

While a Portfolio Manager does not control market trends, they are often blamed when a fund underperforms.


Where they work

Wealth Management Firms
Banks and Financial Institutions
Insurance Companies
Hedge Funds


Portfolio Managers typically work for large financial institutions and firms that have millions of dollars available to establish mutual funds or ETFs. Common employers include wealth management firms, banks, hedge funds, and other organizations involved in the securities industry. They may also work for insurance companies or manage pension funds for private companies.

How to become one

Step 1: Study Math in High School

Portfolio Managers use statistical analysis and other math skills, which high school students can develop by studying advanced math.

Step 2: Earn a Bachelor’s Degree

A Bachelor’s degree is the minimum requirement for entering this field. Most Portfolio Managers hold Bachelor’s degrees in Finance, Economics, Statistics, or Business Administration.

Step 3: Consider Earning a Master’s Degree

An increasing number of Portfolio Managers have Master’s degrees in Risk Management, Accounting, or Finance.

Step 4: Look for Work as a Research Analyst

After finishing college, apply for entry-level Research Analyst or Financial Analyst positions. 

Step 5: Obtain a License to Manage Investment Portfolios

Before managing a portfolio, Portfolio Managers need to earn a license through the Financial Industry Regulatory Authority (FINRA).

Step 6: Register with the SEC

If a portfolio has more than $25 million in investments, the Portfolio Manager needs to be registered with the US Securities and Exchange Commission (SEC).

Step 7: Earn a Voluntary Certification

Most Portfolio Managers gain voluntary certifications to advance their careers. The most common certification is the Chartered Financial Analyst (CFA).

Should you become one

Best personality for this career
The Leader

People with this personality likes to start and work on projects. They also like leading people and making many decisions. You can read more about these career personality types here.

Portfolio Managers need to be decisive and confident in their decisions, as they are working with large sums of money. They also need to have good critical thinking skills to analyze financial reports and select the right trades.

Successful Portfolio Managers tend to have excellent communication skills, as they frequently work with a team of Research Analysts.

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