A Day in the Life of a Portfolio Manager

Daniel Tan is a Portfolio Manager at Grasshopper Asset Management.

He joined in 2023 and was previously, Chief Investment Officer of JMC Capital Asset Management’s Singapore office.

He also held senior positions across High Yield Research and Portfolio Management functions in Deutsche Bank Wealth Management, Amundi-Pioneer Asset Management, and BNP Paribas Global Markets. He spent his early career at GIC.

Daniel graduated from Nanyang Technological University with First Class Honours in BSc. Business.

Here is a day in his life at Grasshopper Asset Management…

My Daily routine

My typical routine would entail around 2 hours in the morning to check investment positions of my existing portfolios. Typically, what I would check for is whether there was any major developments overnight in the United States, such as non-farm payrolls or FOMC meetings. In the Asian markets, I would check if there were major announcements in economies such as Australia, Japan and China.

As Australia, Korea and Japan markets open earlier than other Asian markets, I would have to complete those related trades by around 2 pm Singapore time, if I have to rebalance the portfolios.

On top of Asian trades, I may also have to stay up on certain nights to complete trades in Latin America, Europe and United States. This is because liquidity of trades tends to be thin for this markets during Asian hours, and would tend to improve during the evenings for these markets.

Throughout the day, I may have to attend external meetings with trading counterparties, custodians, and clients, and that would typically take up around 10% to 20% of my daily routine. In addition, if I would to conduct portfolio reviews for clients, that would take up around 40% of my time during the day.  

What are the challenges and rewards of being a PM?

The challenge of a good portfolio manager is to avoid buying the wrong investments. The other challenge is to be brave enough to admit wrong calls and not doubling an investment when it goes against you. Too often, we have seen examples of portfolio managers doubling their investments and end up with a bigger losing position. The other challenge of a portfolio manager is to be mathematically astute with knowing your exposure and knowing what sort of risks goes into the portfolio at the end of every day.     

What are some common rookie mistakes in asset management?

One of the most crucial things in asset management is to understand positioning and sizing of investment positions, and how movement in equities markets and US Treasury yields would impact the daily profit and loss of the portfolio.

The main difference between a junior and senior portfolio manager, is that the latter tends to be more experienced in sizing portfolio’s investment positions and making portfolio management decisions in bull and bear markets. For instance, I have seen many instances during my last 17 years, whereby portfolio managers doubled their investment positions when markets fall, and hoping to recover faster when markets recover. However, they would overlook the fact that if this investment view is wrong, they would end up having more losses to deal with. I had first-hand experience witnessing portfolio managers having to deal with massive losses during the sell-off in Chinese equity markets between June 2015 to June 2016 when US-Sino trade war tensions were heightened. History repeated itself during the covid period between March 2021 and September 2022, where the Chinese property USD bond market probably saw the worst crisis that has ever happened in the last twenty years, which spilled over into the Chinese equity markets. I saw fund managers making the mistake of doubling their exposure into China property bonds when the bonds were trading at a steep discount, and hoping for a recovery in the sector.

A senior portfolio manager would also be required to have certain years of experience before attending client meetings. Both institutional and retail clients tend to require certain years of experience from their portfolio managers in order to entrust their investment portfolio with us. Some of these clients could be assessing managers in their role as gatekeeper of a large institutional organisation or they could be a person who is entrusted to manage the wealth of their family.

Recommended Resources: 

Useful reading materials that I have relied on during the course of my work are: 

1.       Challenging brainteasers for interviews by Dan Stefanica and Rado Radoicic

2.       Heard on the Street by Timothy Falcon Crack

3.       A practical guide to Quantitative Finance Interviews by Xinfeng Zhou

4.       Macroeconomics by Charles I. Jones

5.       The handbook of Fixed Income securities by Frank Fabozzi

6.       Options, Futures, and Other Derivatives by John Hull

7.       Cracking the Finance Quant Interview by Jean Peyre.