The fixed income industry is likely to grow considerably in the coming years. That’s because fixed income is a more conservative investment option than stock. This makes fixed-income investments ideal for those who are more risk-averse and have shorter time horizons. such as those who are retired or nearing retirement. Due to the aging of the baby boomers, this segment of the population will only continue to grow, which should, in turn, increase the need for fixed-income investments.

What is Fixed Income?

To understand fixed-income careers, it helps to first understand fixed-income investments. Fixed income is an investment category that pays a “fixed” amount in interest until its maturity date. Fixed income is essentially the investor giving the issuing entity, usually a company or the government, a loan. For the issuing entity, fixed income is a way to raise extra cash for either a big project or to cover day to day expenses. Investors benefit because they receive their principal back, plus interest. Investors often choose fixed income investments to help minimize their risk, while still growing their portfolio.

The Fixed Income Industry

Though there are positions and firms that specialize exclusively in fixed income, these are relatively rare. Instead, fixed-income careers are more often specializations of other areas of finance, as opposed to its own separate and distinct field. For example, a portfolio manager may start out with a broad focus, but over time may begin to focus more and more on fixed income and then eventually move to a role as a full-time fixed income portfolio manager. Two of the most common positions where this specialization occurs are fixed income traders and fixed income portfolio managers.

Fixed Income Trader

A fixed income trader is the most common fixed-income career. Much like any other trader, a fixed income trader makes trades for clients, either institutional or retail. Fixed-income traders typically work for either broker-dealers or banks. A position as a fixed income trader is not an entry-level position and firms usually require at least three to five years of experience, depending on the specific role. For more senior positions, the requirement may even be closer to seven years. According to Glassdoor, the annual compensation for a fixed income trader has a wide range. Though the average annual compensation is $81,365, the lower end is about $56,000 and the higher end of compensation is over $200,000.

Fixed Income Portfolio Manager

Like a fixed income trader, a fixed income portfolio manager must also manage trades for clients, but trading is only part of a portfolio manager’s responsibilities. A fixed income portfolio manager must also create and implement the portfolio strategy. This requires holistically viewing the portfolio, as opposed to only focusing on specific trades. A position as a fixed income portfolio manager can be quite lucrative, with an average annual compensation of $105,775 according to Glassdoor.

Careers in Fixed Income

Careers in fixed income can be lucrative, challenging, and rewarding. An added benefit is that the fixed income industry is likely to grow as the population ages. Since this field of finance is interwoven into many other areas of finance, a career in fixed income also has the potential of many different career paths.

Develop a complete set of desk-ready skills for fixed income market participants. You will learn how to determine fair values, yields, and risk measures for a wide variety of instruments including government bonds, corporate bonds, mortgage securities, and fixed income derivatives. Understand the structure and trading conventions of fixed income markets, and learn how to construct, interpret and trade the term structure of interest rates.

 The New York Institute of Finance (NYIF) is a global leader in professional training for financial services and related industries. NYIF courses cover everything from investment banking, asset pricing, insurance and market structure to financial modeling, treasury operations, and accounting. The New York Institute of Finance has a faculty of industry leaders and offers a range of program delivery options, including self-study, online courses, and in-person classes. Founded by the New York Stock Exchange in 1922, NYIF has trained over 250,000 professionals online and in-class, in over 120 countries.

See all of NYIF’s training and qualifications here.