Best Fixed Income Desks for Rotation
Incoming FT, interned in quant development and now have to pick rotations - not very interested in vol desks but have to pick between the following three (already selected for IRS):
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Cash Bonds
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Funding/Treasury (Balance Sheet)
How would you rank them in terms of best opportunities to learn and are most applicable in leaving to a Macro/Fixed Income RV HF? Doubt I will end up getting a spot on IRS.
Based on the most helpful WSO content, when considering rotations for a full-time position, especially with an eye towards moving to a Macro/Fixed Income Relative Value Hedge Fund (RV HF) later on, it's important to consider which desks will provide the most relevant experience and knowledge. Here's a breakdown of the three options you've mentioned:
Cash Bonds:
Repo:
Funding/Treasury (Balance Sheet):
In terms of ranking for best opportunities to learn and applicability for a Macro/Fixed Income RV HF, it would generally be:
Cash Bonds are most directly related to the markets and will likely provide the most transferable skills for a hedge fund focused on macro and fixed income strategies. Repo could also be valuable, especially for understanding the plumbing of the financial system, which is essential for macro trading. Funding/Treasury is less market-facing but offers a unique perspective on how large financial institutions manage their liquidity and regulatory requirements.
Remember, the best choice also depends on your personal interests and where you see yourself fitting best. Each desk has its own set of skills and knowledge that can be valuable in the hedge fund space.
Sources: What fx/rates/fixed income desk is best for macro/rates hedge funds?, Q&A: Non-Target School to Portfolio Manager at a Top Hedge Fund – 6 Years Out of Undergrad, Macro vs Rates RV, Big3 Credit Rating grad > IB after 1 year, Q&A Macro RV Analyst/Trader
bump
Cash bonds should be the top selection after IRS. You’ll learn to hedge and run a book in this seat, potentially take some risk too.
Repo should be second because the plumbing markets are really important to the financial ecosystem (qt, policy rates) so you’ll learn a lot of the fundamentals in macro.
Funding/balance sheet depends. If you’re just running analytics and doing overnight funding tickets/micro funding assets, then it should be bottom choice. If you get discretionary choices in funding liabilities to match off your assets, then you can run a hidden prop book. Rare so I doubt it.
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