Many young graduates looking to get into the Investment Management industry want to get a role as an Equity Analyst but don’t know exactly what an Equity Analyst does or what the day to day duties of one look like. Here we’ll give some insight into what you can expect if you’re looking to join an investment management firm and become an Equity Analyst.
What are the responsibilities of an Equity Analyst?
An Equity Analyst analyses companies based on their fundamentals (i.e. operations, competitive position, value proposition etc.) to see what they think the company is worth. Then they compare that to how much the market is offering that company for and make recommendations as to whether their clients should have that company in their investment portfolio.
What is an average day in the life of an Equity Analyst?
It really depends on the day, but on most days it’s a lot of reading of investment blogs, company financials and annual reports, industry reports, and the writings of well-regarded and established investors (like Warren Buffett, Ray Dalio etc.)
On some days, you spend time talking to company management, industry experts, competitors and brokers to get a more complete picture of a company. You also spend time speaking to the portfolio managers in your firm about why they should own a company you cover, or why they should sell out of a company that you cover.
On some days, you spend time going over the latest results, updating your financial models and reporting back to the Investment team on the important drivers of that result.
On other days you spend time looking for investment ideas by speaking to the rest of the Investment team and doing some research of your own. You will need to put together information on why it’s a good investment idea so that usually involves some writing and filtering of all the important information about a company, and trying to distil the reasons for owning it to a few sentences.
You also need to keep up to date on all the companies under your coverage in terms of what the most important drivers of them are, so you know if a news item is important or if it is just noise.
Requirements to become an Equity Analyst
This depends on the company, but most companies either want someone with a CA(SA) qualification or someone with an Investment or Math degree or postgraduate degree in Investments and ideally some progression or aim to become a CFA Charterholder.
Is it right for you?
If you are someone who has a curious mind with an analytical way of expressing that curiosity then an Equity Analyst job could be the role for you. You will need to be comfortable not knowing everything because it is more of a probabilistic business rather than one with a certain outcome. We hope this helps you on your career path.
Written by Financial Recruitment Consultant, Vuvu Nzube – firstname.lastname@example.org