The position of portfolio manager is highly coveted in the financial industry. You can make a lot of money and carry a lot of prestige when you work your way up to this role. As a portfolio manager, your job is to make high-level investing decisions for a fund or a large institution, such as a bank or insurance company. Oftentimes, a portfolio manager has the final say on where millions of dollars are invested, which is why companies pay big salaries to attract top talent to this role.
Even landing an interview for a portfolio manager job typically requires a lot of high-level education and years of experience. Once you get to the interview stage, the competition is brutal, making it important to ace your interview. Anticipate the questions that are coming your way and have winning answers prepared.
"Tell Me About Your Investing Strategy"
First and foremost, the interviewer wants to ensure your investing strategy meshes with the company's goals. After all, as a portfolio manager, you are the final decision-maker on huge investments. If your strategy is antithetical to that of the company, a tense situation is going to arise very quickly.
You want to strike a balance with your response. On one hand, study the company thoroughly before your interview and try to discern its core philosophies. Work these into your response so the interviewer knows you have the company's best interests in mind. At the same time, by this point in your career, you have invariably developed some pretty firm beliefs about investing. Be forthright about them, even if you think it is not what the interviewer wants to hear. It is best to get everything on the table during the interview stage to ensure a mutually good fit.
"What Professional Designations Do You Carry?"
A portfolio manager candidate almost invariably has years of investing experience and has racked up numerous professional designations. The most common is the Chartered Financial Analyst (CFA) designation, which tests a candidate's knowledge in finance, accounting, statistics and quantitative analysis. Much of the job involves taking mountains of data, extracting hard-to-find trends, and using them to make forecasts and predictions; a CFA designation demonstrates proficiency in this type of analysis.
Securities licenses, such as a Series 7, Series 63 and Series 66, are common as well since many portfolio managers have active backgrounds in selling securities. However, it is important for a portfolio manager to not just be a good salesperson but also to have a deep understanding of the market and preternatural skills in analyzing data and making forecasts.
"How Would You Analyze the Risk of (Investment Method)?"
At some point, your interviewer is going to test your technical knowledge. Usually, this means offering a somewhat esoteric investing strategy, such as currency arbitrage, and asking you to complete a risk analysis on it. In the wake of the 2008 financial crisis, managing risk is more important than ever for financial institutions. Your interviewer wants to be confident your methods for assessing risk and making decisions based on your findings are sound.
Given the current economic climate, it is usually better to err on the conservative side when preparing a mock risk analysis in a job interview. These institutions want to make a lot of money, and they are hoping the candidate they hire helps them with that goal. First and foremost, however, they do not want to lose their shirt like a lot of banks did in 2008. If you can prove an ability to make smart investing decisions that protect the company's portfolio in good economic times and bad, you stand a high chance of being selected for the job.