What Does an Equity Strategist Actually Do?

If you’ve ever watched Bloomberg TV or CNBC you’ve probably seen interviews with senior equity strategists from major banks. They mumble some words about volatility, sector weightings, yield curves, or something similar. But when they’re not making up fluff on TV, what do equity strategists really do day to day?

Overview of the Equity Strategist Role

Equity strategists usually sit within the equity research division of major investment banks. The equity research department’s job is to provide the bank’s clients with proprietary analysis on various companies that the bank covers, typically a job done by an equity research analyst.

Equity strategists, on the other hand, focus on the macro view rather than on individual equities. They essentially provide the top-down view of the market.

Their work will produce various insights at the market level, with a few examples below:

• Guidance on which sectors are poised for over or underperformance (should investors target durable goods over technology, avoid commodities producers, etc.)
• Preference for small cap vs. large cap stocks (do market conditions warrant exposure to certain types of companies)
• Which regions or countries should be targeted or avoided
• Whether investors should focus on high beta or low beta equities
• The never-ending debate between value vs. growth stocks

The list goes on and on, but it’s essentially their job to opine on anything related to the market, but above the level of an individual company.

Day to Day Tasks

So now we have an idea of what an equity strategist does at a high level, but what does that mean in terms of day to day responsibilities? Again, it’s really not too dissimilar from the tasks of an equity research analyst.

Here are a few representative parts of the job:

• Building and updating financial models and comps sets for to evaluate companies and market segments
• Stay up to date on various business trade publications, annual reports, financial filings and other sources, synthesizing and interpreting relevant info
• Preparing research reports – this could be quick briefs on earnings results or more in-depth pieces of original analysis
• Deliver recommendations to sales and trading teams, management teams, and institutional investor clients
• Collaborate with equity sector fundamental analysts, economists, data science team and macro strategy teams across asset classes
• Formulate views on broad equity indices, sectors and style factors based on a combination of top-down macroeconomic views, bottom up equity fundamental analysis and cross-asset views

Again, not to different from an equity research analyst, other than the shift in focus to broader macro topics with sector-wide and market-wide views.

How to Get an Equity Strategist Job

If you like the sound of the role, the logical next step is to figure out how to land an equity strategist role with a bank. Unfortunately, equity strategist positions are not nearly as abundant as equity research analyst positions. This makes sense when you consider the number of companies in coverage universes, vs. the number of macro views needed.

But don’t worry, it’s definitely still possible.

You are likely to need an advanced degree or credential to be competitive for an equity strategist position. This typically means a Master’s in finance, markets-focused MBA, CFA charter, or similar. It’s just not as common to start in an equity strategist role straight out of undergrad.

The other path, however, is to start as an equity researcher out of undergrad. As you progress through the firm, you’ll pick up highly relevant skills and eventually have the opportunity to transfer to a strategist role internally, or be competitive enough to recruit externally.

The other thing that’s important to note is the importance of networking. As with any finance job, it’s just as much what you know as who you know. Your dad doesn’t need to be golf buddies with David Solomon, but you should hit up alumni from your university who are equity strategists and do the whole coffee chat thing. It’s not pleasant and might make you feel slimy, but is an unfortunate necessity. This is true whether or not you check off all the boxes above, you just need to do it.

Closing Thoughts

In my opinion this is probably one of the more interesting roles on the Street. It’s also one of the more difficult roles to get, so know what you’re up against if you’re dead set on it. With that, your comp will probably be worse than an equivalent investment banker. It’s also worth mentioning that the ranks get tight as you move up. A bank only needs so many heads of equity strategy, and there are only so many banks.