Interview Questions Flashcards
What does an investment manager do?
Investment Fund Managers:
Provide financial advice and services to private and corporate clients about a range of investment matters, including buying and selling investment trusts and shares or bonds.
Help these clients invest their money in the best places.
What are your interests and experiences in the area of finance and investments.
Keeping knowledge up-to-date about the UK economy, current financial news and financial markets through news outlets such as BBC News and the Financial Times online.
Use of Virtual Portfolios such as the London Stock Exchange and Morning Star have allowed me to trial using a few investment strategies.
What are the teams you rotate around?
Active Equity
Active Fixed Income
Multi-Asset
Solutions
Index funds
Liability Driven Investments
What is Active Equity?
The first step is to expose the portfolio to an index to realise market returns.
The second goal is to provide exposure to returns derived from active management.
Enhanced active equity can be of great value to any investor to gain the potential for larger returns on less capital.
This allows for long stock positions to be used as collateral for short stock positions.
What is Active Fixed Income and how can you add value?
The basic strategy is buying bonds and holding until maturity.
The return is approximately the average yield of the bonds in the portfolio.
There are two basic ways to add value:
1) Generate a total return above what a buy and hold (or yield only) strategy would generate;
2) Reduce volatility from a fixed income portfolio so that more risk can be taken elsewhere in pursuit of greater overall portfolio rewards.
What is Multi Asset?
A multi-asset class investment contains more than one asset class, creating a group or portfolio of assets.
This reduces risk (volatility) compared to holding one class of assets, but might also hinder potential returns.
For example, a multi-asset class investor might hold bonds, stocks, cash and real property, whereas a single-class investor might only hold stocks.
What is an ‘Index Fund’
An index fund is a type of mutual fund with a portfolio constructed to match or track the components of a market index, such as the Standard and Poor’s 500 Index (S&P 500).
An index mutual fund is said to provide broad market exposure, low operating expenses and low portfolio turnover.
These funds adhere to specific rules or standards (e.g. efficient tax management or reducing tracking errors) that stay in place no matter the state of the markets.
What is LDI?
A liability-driven investment, otherwise known as liability-driven investing, is primarily slated toward gaining enough assets to cover all current and future liabilities.
This type of investing is common when dealing with defined-benefit pension plans because the liabilities involved quite frequently climb into billions of dollars with the largest of the pension plans.
What is a portfolio?
A portfolio is a grouping of financial assets such as stocks, bonds, commodities, currencies and cash equivalents, as well as their fund counterparts, including mutual, exchange-traded and closed funds.
What are the typical tasks of an Investment Manager?
Regularly meeting with investment analysts and company managers to discuss financial matters.
Researching companies.
Gathering information.
Reading financial briefings (often written by investment analysts).
Making informed financial recommendations and decisions.
Keeping knowledge up-to-date about the UK economy, current financial news and financial markets.
Assessing and interpreting complicated financial information.
Liaising with clients.
What does LGIM do?
They provide reliable and secure pension income for individuals and members of corporate pension schemes and invest funds in many types of direct investments.
Why are you interested in financial markets, asset management, or investing?
Graduates working in investment, fund or asset management contribute ideas to investment portfolios from day one on the job. This is particularly appealing as I would have the chance to get involved straight away.
I also enjoy working with numbers and solving problems, so using a combination of problem solving and numerical skills to invest people money effectively is something I am eager to be involved in.
What are the effects of the credit crunch?
The growth stocks of former years may not be those of the future.
The longer-term effects of the credit crunch have yet to be seen but are having a powerful impact on all markets and shifting the contours of the global economy.
Why do you want to work for Legal and General Investment Management?
- Opportunity to work for a globally renowned investment management firm and the Uk’s largest asset manager.
- I strongly agree with the emphasis on helping L&G IM’s customers. The decisions made can greatly affect the lives of the customers it is significant that decisions always consider their interests and create products which are best for them.
- Social Governance factors - Commitment to helping our communities with activities aimed at overcoming the stigma of mental health, with support of ‘World Mental Health Day’, ‘Children’s Mental Health Week’ and the ‘Not a Red Card’ campaign.
- Commitment to financial sustainability with investments which bring about positive change and help build, cities, homes, jobs and communities. An example of this is investing £14.4 billion creating real assets and real jobs for the real economy.
- The straightforward, collaborative and purposeful core values of LGIM are a working environment that I would thrive in.
What are LGIM’s core values?
Straightforward - How we communicate Building trust by doing what we say and saying what we mean. We are fair and transparent, open to feedback and always seek to communicate in a fair and genuine way.
Collaborative - Working together constructively, seeking out originality in ideas and valuing the diversity in our teams. We engage our networks and stakeholders to shape our ideas and manage the impact of our decisions.
Purposeful - How we deliver Balancing performance with principles to do what’s right for the business and our customers. We work with pace and energy, always taking ownership and demonstrating excellent execution.
