Multi Asset & Income (MA&I)
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What is MA&I Investing?

As the name suggests, the Multi Asset and Income (MA&I) department invests in a range of asset classes. Most of our analysts spend their time looking at bonds – the debt instruments that countries and companies issue to borrow money. Like most loans, these come with an interest rate – which is part of the return our clients make when they invest. Our clients will lose their capital if a bond isn’t repaid, so our research focuses on assessing the issuer’s future financial resilience.

The department is split into four main teams, each focusing on different asset classes. Two work with government debt and currencies: the Emerging Market Debt team, who look at emerging countries like India, China or Brazil, and the Global Rates & Currencies team, who focus on more developed economies, including the USA and Western Europe. The Credit team invests in company bonds, from the largest companies in the world to smaller privately-owned businesses. And finally, the Multi Asset Team invests in a broad range of asset types, from bonds and equities, to commodities and real estate.

Case Study Ellie Lewis

What does your job involve?

I work in the Credit team where we purchase bonds from companies. Due to the current market conditions, we’re doing a lot of update research to make sure the existing bonds in our portfolio are still worth holding. I was asked to look at Co-Op Supermarkets, which is a bond we’ve held for many years, but haven’t done a deep dive on in a while. I was tasked with bringing a fresh perspective to the fundamentals of the company.

What’s your personal approach to the work?

Other than being a customer of the Co-Op, I didn’t know anything about them, so I spent a couple of days getting acquainted with the sector. I watched YouTube videos, talked to other members of the team and found out about the research they’ve done on the company. Then I started to get to know the history of the company by reading articles about their big news events. I read through their annual report, rating agency reports (like Moody’s) and other broker and bank reports. I contacted the management, but as Co-Op doesn’t have an investor relations team it was challenging to get much information. It was at this point that I started to figure out what the main points in my report were going to be.

What specific processes do you use to assess companies?

In our team we use a standard approach to our reports, completing six sections to profile the company (the business description, prospects, ESG considerations, capital structure, valuation and an appendix with our financial models). We also think about long-term prospects and, for the Co-Op, I was looking at things like supply chain issues, inflationary impact and whether their convenience-style model still works when compared with stores like Tesco or Sainsbury’s. Our financial models involve some simple calculations. We create a statement of revenues, profit and cash flows, for three to four years in the past, and then try to estimate this for the future. We also value the bonds, looking at the price and yield of the bond and how it compares to the other bonds we own, and similar bonds in the market.

What are the timescales like for completing your research?

There’s no set deadline for the research. You’ve got however long you need to produce a quality piece of work. Some people do fundamentals research in just a week, I spent about two and a half weeks doing more in-depth research. From starting the task to presenting my final report for discussion at a team meeting, the whole process took around three weeks.

What kind of support did you receive?

We all have team mentors, and they’re the first port of call if you have a question. I’m constantly chatting to my mentor. In the beginning, you get a lot of support and they really hold your hand through the research and report-writing process. Now I’m more experienced, I feel able to ask more technical questions or query things I’m less familiar with. I can also go to other members of the team and use their knowledge. For example, my Team Leader is an expert when it comes to the nitpicking bits of financial modelling.

How did you balance your research project with the other responsibilities of your role?

As well as my own research, there’s a chance to discuss what everyone else is working on in our Thursday team meeting. People send out their research in advance, so I usually spend half a day reading through their reports and thinking about any questions I can send over to them. I also spend about an hour each day catching up on news updates on the 35 companies I’m responsible for monitoring. There’s plenty of social projects to get involved with too. I recently attended a meeting of Baillie Gifford’s Women’s Network to discuss an event we’re running this year.

What skills do you need to excel at your role?

One of the most challenging parts of the job is the reading. There are a lot of long reports on subjects that may not immediately interest you, so you need to focus in order to pull out the key information. You have to be analytic in your thinking too, considering both the pros and cons of a company’s strategy. It’s important to convey an argument that’s engaging, and sometimes even entertaining. You’re taking your colleagues on a journey with you and may need to speak off the cuff. This was something I wasn’t used to when I joined, but I’ve developed the skill over time.