The investment team at most buy-side firms is comprised of multiple layers including portfolio management, trading, portfolio analytics, risk, compliance, and legal teams.

Each layer is a necessary component to ensure a portfolio is managed within fiduciary and client guidelines. A portfolio analyst works with many of the team layers and is a crucial entry-level position in the field of investment management.

Learn more about what a portfolio analyst does, how to become one, and what people in this profession generally earn.

Key Takeaways

  • Portfolio analysts assist in the composition and maintenance of investment portfolios for investment firms.
  • Portfolio analysts engage in equity research using fundamental analysis, valuation models, and other metrics.
  • Successful portfolio analysts may continue on to become portfolio managers.

What Is Portfolio Analysis?

Portfolio analysis is an involved and comprehensive job that requires a strong financial background through past experience and education. Although a bachelor’s degree in finance, economics, or accounting is the most common educational requirement, many portfolio analysts have advanced degrees. Professional credentials such as the Chartered Financial Analyst (CFA) designation are also commonly required.

The job duties required of portfolio analysts differ greatly among firms. Yet, despite the differences, portfolio analysts typically perform several common duties, such as conducting detailed portfolio analysis and preparing reports.

Included in the portfolio analysis is a comparison of different industries, consideration of historic trends, and an understanding of financial metrics and regulatory/legal restrictions that may impact the portfolio. Portfolio analysts frequently utilize specific software applications that attribute portfolio performance to individual securities or asset allocations.

Portfolio analysts may also conduct client meetings, and communicate portfolio information to clients and client requirements to managers.

Note

Often, portfolio analysts move up to be portfolio managers or other investment team members responsible for making the firm’s overall investment decisions.

Average Salaries for Portfolio Analyst

Portfolio analysts have a median salary of $83,300 (according to Glassdoor as of 2022). Incentive compensation (annual bonus) is reported to be about $16,400 on average, raising the median total compensation to $99,700.

The variance of total compensation for portfolio analysts can be wide, depending on years of experience and the type of firm, and the variation is often split between annual salary and incentive compensation.

Additionally, geographic location plays a key role in the level of compensation. For example, portfolio analysts in the New York metropolitan area can make up to 15% more than the national average.

Lastly, portfolio analysts get paid more than their peers. The average portfolio analyst salary is 25% higher than the national median wage, demonstrating the overall highly compensated nature of these jobs.

How Do You Earn a CFA?

Earning a chartered financial analyst (CFA) designation will set you apart as someone who has met certain requirements designed to test your integrity and competence. The standards for getting a CFA are set by the CFA Institute, a global organization that dictates standards and codes of ethics for financial analysts.

You must pass a three exams to get your CFA designation, each of which is 4.5 hours. Topics include finance, economics, ethics, and financial analysis. You must also complete 4,000 hours of work completed in three years and commit to the CFA Institute’s code of ethics and standards of professional conduct.

What Qualifications Does a Portfolio Analyst Job Require?

Portfolio analysts should have strong quantitative and analytical skills, and good knowledge of markets and investments. Increasingly, employers want candidates with some computer language skills such as Python, R, and SQL. A bachelor’s degree is often required, and an advanced degree in finance or a related field is also helpful.

Is a Portfolio Analyst a Good Way to Start a Career in Portfolio Management?

Yes. Portfolio analysts work under the supervision of more senior researchers and portfolio managers. As an analyst, you get to gain real-world experience with hands-on with portfolio construction and analytics. The role of analyst provides training for making critical investment decisions. Successful portfolio analysts may expect to be promoted within 2-4 years, on average.

What Are Other Names for the Role of Portfolio Analyst?

Depending on the firm, the role of portfolio analyst may have slightly different names. These can include research analyst, equity analyst, investment analyst, or junior portfolio manager, among others.

Do You Need a College Degree to Get a CFA?

You don’t need a college degree to get a chartered financial analyst (CFA) designation. Instead, you must pass a series of three levels of exams on topics such as economics, accounting, money management, ethics, and security analysis. However, having a college degree in finance, accounting, or economics can boost your chances of getting a job as a financial analyst.

The Bottom Line

Portfolio analysts have the exciting role of working between the investment team layers which allows them to learn about various aspects of the investment organization from portfolio management to risk and legal. This is a good way to determine what aspect of the investment organization is of interest for future opportunities.

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