A day in the life of a municipal portfolio manager in the time of coronavirus
5:15 a.m. My iPhone alarm melodically signals the start of the day. I practice guided meditation for several minutes, then sit outside with my first cup of coffee to plan my day, listening to the silence and admiring Santa Fe’s beautiful Sangre de Cristo mountains in the morning light.
During a typical workday, I have four main responsibilities: trading, portfolio management tasks, credit analysis and marketing. At a larger firm, these functions are often handled by different people, but Thornburg is a boutique. Plus, as generalists, we all wear multiple hats in our roles. More about that below.
6:15 a.m. I log in from my bedroom workstation. I greet the other four members of our muni team, review news headlines, emails, and Slack and Instant Bloomberg chat messages. The rest of the morning is filled with trading activity.
Perhaps it’s unusual for someone from Kiev to have a career in U.S. municipal bonds, but I’ve always been fascinated with urbanism, particularly how we live and organize our lives, spatially and socially. While at Columbia University, I majored in urban studies, and a professor suggested the municipal finance path after hearing first-hand my wonder about city and state financing.
Thornburg’s first portfolios were municipal bond focused. Our founder recognized the value tax-advantaged muni bonds together with their low historical default rate could have for investors and started one of the early funds for retail investors in 1984, which we still manage today.
8:00 a.m. Sasha and Sofia, my twins, come in to my “office” to say good morning and tell me about their dreams.
12:15 p.m. Break time! At least it is for our nanny. My husband Michael and I feed our seven-year old twins lunch. One of us reads aloud Captain Underpants while the other serves chicken soup.
1:15 p.m. After my lunch break, I head for my outdoor standup workstation with mountain vista. The view is more nourishing than the chicken soup.
Our clients appreciate our accessibility, so I regularly have questions from them to answer. In markets like these, they inquire about specific issuers and ailing sectors. I write up my analyses and send them off.
Later, I collaborate by teleconference with my investment team colleagues on research across sectors, asset classes and geography. For example, I may want to know what’s happening at the corporate level from my counterparts in equities and taxable fixed income because some municipality relies on a major employer to generate state and local income tax. My colleagues on the equities and corporate bond desks likewise are interested in hearing developments from the muni team about state policies, business re-openings and people getting back to work.
5:15 p.m. I end my workday and transition to family time. We walk a nearby trail, then have dinner and hop on Zoom with grandparents in New York and Philadelphia.
8:15 p.m. I am exhausted now but spend an hour sorting through disclosure notice posts on EMMA. These notices can be early warning signs of changes in an obligor’s willingness or ability to pay.
9:15 p.m. I climb into bed and pick up A Gentleman in Moscow, the book club selection I am supposed to have read for our Sunday gathering. It’s a wonderful story by Amor Towles about a charming Russian aristocrat, Count Alexander Ilyich Rostov, who is ordered by a Bolshevik tribunal to spend the rest of his life in a luxury hotel in the heart of Moscow. He has been spared execution because a famous Revolutionary poem has been attributed to him.
This novel is very timely given the coronavirus requirement to shelter at home and I note that Towles was also engaged in financial services for much of his career, as an investment banker and director of research. I take comfort in the fact that his hero, Count Rostov, managed to live a full, meaningful life while under house arrest and I fall asleep before 10.
There is an Aesop folktale, obviously pre-Hoover vacuum, that offers the moral that nobody is strong enough to break the bunched twigs of a broom but breaking them one at a time is easy. I liken this to our investment team’s collaborative approach, not only to research, but also to the various functions which contribute to portfolio management excellence.
Managing money professionally should encompass understanding of what you are buying (credit analysis), at what level in today’s market (trading), and if it is advantageous for and accomplishes the client’s goals (portfolio management). While not a primary PM responsibility, marketing is also important, as it provides a feedback loop that can be valuable in understanding client wants and needs.
From the beginning of my career, all I had seen on Wall Street were “trenches” of PMs, traders and credit analysts. Oftentimes, these groups would even belong to different departments, sit on different floors and have to set aside time to meet, while waiting on credit reviews and updates. Each group might be excelling in and perfecting their own tasks, but ultimately, each group’s view was being severely siloed by assigned roles.
That view, in my opinion, is a one-dimensional observation of a highly complex marketplace. As with all one-dimensional approaches, it is flawed. I began to question the inefficiencies of this one dimensional setup: to see clearly the insecurities of the credit analysts who do not understand pricing and yield curve references, to observe traders who can’t differentiate between issuers and ultimate obligors, to note frustrations of portfolio managers who get tangled in assigning ratings and outlooks.
A conversation with our fixed income team became my lightbulb career moment. They talked about their approach to investing: the same person should be able to analyze the obligor’s financial statements, take note of market movements, and track portfolio needs. This makes the job three times as hard, but 1,000 times more interesting and rewarding, and that always leads to increased productivity. In addition, it leads to deep commitment, engagement and a real sense of ownership.