Nicolas Robin of Threadneedle Investments explains the typical role of a fund manager, including the skills, knowledge and processes involved in being successful.
Date: Apr 2012
For example, in the energy markets, he gets numbers on Tuesdays and Wednesdays on all the oil-based products, and these figures have an impact on the way that the energy markets trade every week.
In addition, Robin said he does a lot of modeling in terms of expectations, not only for the weekly data points but also in terms of the trends in the inventory levels, to determine the way to trade these markets and positions.
Collating data to create products
Robin said his fund takes a dual approach which combines some top-down analysis with a very deep bottom-up look at every commodity available to invest in.
He said the fund looks at inventories, and at the supply and demand, and then combined with the fund managers’ understanding of the markets overall, they will position the portfolio accordingly.
Skills to be successful
To be successful in his role, Robin said the skills he needs include a combination of attention to detail and the ability to take a certain point of view.
This requires an understanding of all aspects of the modeling, and an ability to step back and take a broader look at the situation, he added.
Changing role of commodity managers
According to Robin, over the last 10 years, the level of knowledge about commodities has significantly increased.
When he started in the industry in 2001, trading hedge funds which invested in commodities, he said that in investor meetings he had to start explaining about products and strategies from the very bottom, given the limited level of awareness of key parts of the commodity markets like term structure and the impact of contango.
These aspects are now getting more and more mainstream, so the level of education required by fund managers to investors is now less, he said.