INVESTMENT BUSINESS

An investment analyst undertakes research to provide ideas and information to fund managers. The information they provide enables the fund manager to make decisions relating to the investment portfolios that they manage. Some analysts work for investment management companies, providing information to in-house fund managers; others may work for stockbrokers and investment banks where their research assists clients of the company (usually fund managers).

Main investors (apart from individuals) are pension funds, life assurance companies, unit trusts, investment trusts, banks and major companies (known as institutional investors). Investment analysts can cover a broad range of activities and disciplines, which can vary according to the nature of the employer. Essentially, they need to develop an understanding of financial information, such as company accounts, statistics, economics, and political events.

They must also develop expertise in interpreting that information and the implications for investment decisions. An analyst may have a set of companies to research and develop in-depth knowledge of, in order to make informed recommendations to fund managers. These are usually in a specific industrial sector, such as retail or utilities, or a geographical area, such as Europe or the Far East. Analysing financial information relating to the companies they are researching, e.g. a new set of accounts, profit and loss and cash flow statements.

Conducting regular meetings with the management of the companies, sometimes at their premises, e.g. to discuss issues arising from the accounts. Keeping up to date with market developments and all that can affect the markets, e.g. movements in the economies of relevant countries, political events, and even the weather. Monitoring the financial news using specialist media sources. Producing summaries of their research for fund managers, and meeting with them regularly. Maintaining liaison with the management of companies and with fund managers, often by phone.