Are you unsure about how to prepare for a Fund Accounting interview? In this blog post, Gillian from our recruitment team explains 10 things you should know before you go in!

Be prepared for your Fund Accounting Interview. It’s a competitive market place. 

Whilst recruitment in funds is still buoyant, it is still a competitive candidate market, particularly at entry and junior levels. Therefore, it is more important than ever to be well prepared for an interview, in this case, a fund accounting interview. Of course, the most important part of preparing for any interview is knowing your CV inside and out, being prepared for competency-based questions, and of course, technical questions.

A career in fund accounting can be a challenging and rewarding experience. The main job of the fund accountant is to value the fund. They would typically be pulling together various components of the NAV as provided by the transfer agent, pricing team and trade capture team and completing an analysis and tolerance review of these components.  So expect your interviewers to test your knowledge on some of NAV components.

Don’t get yourself worked up on trying to understand and research everything, but make sure you understand the basics.  The below is by no means a definitive list and hiring managers will have their criteria which they are testing for, but if this is your first interview for a fund accounting entry level or intern position, having an understanding of the terms below will be a good starting point for you!

Shocked and surprised boy on the internet with laptop looking up Fund Interview Tips

  1. What is a Fund?

A fund pools together the money from many individuals and then the fund manager uses it to invest in a broad range of assets. Their aim is to grow your money and if required, provide you with a regular income. The fund manager will invest in different asset types such as cash, bonds, equities and property – exactly what the fund manager buys depends on the investment objective of the fund.


  1. What is the NAV & how is it calculated?

NAV = Net asset value, represents a fund’s per share market value. This is the price at which investors buy (subscription) fund shares and sell them (redemption). It is derived by dividing the total value of all the cash and securities in a fund’s portfolio, less any liabilities, by the number of shares outstanding.


  1. Cap Stock Activity:

    This refers to the share base of a fund. Closed-end mutual funds have a constant share base. For open-end mutual funds, changes to the share base can occur on a daily basis due to subscriptions and redemptions.

Subscriptions: New buys into a fund. Increases a fund’s shares outstanding and total net assets.

Redemptions: A sell of a fund holdings. Decreases a fund’s shares outstanding and total net assets.


  1. What is a Benchmark?

A benchmark is a market or sector index against which the performance of a fund can be measured.  As the name suggests, is a point of reference that tells you how a mutual fund has performed vis-a-vis its peers and the market.

Fund Accountant Business woman working at office looking at laptop with a pen in her hand

  1. What is a Bond?

A bond is a debt security, similar to an I.O.U.  Bonds are used by companies, states and sovereign governments to raise money and finance a variety of projects and activities. When you purchase a bond, you are lending money to a government, corporation, or other entity known as an issuer.  In return for that money, the issuer provides you with a bond in which it promises to repay the principal along with interest (coupons) on a specified date (maturity).


  1. What are equities?

Equities are stocks – shares in a company. If you buy stocks, you’re buying equities.  When an investor buys a share they become a part-owner of that company. This entitles them to a share of any profits (via dividends).


  1. What is Future? 

A futures contract is a contract where both parties agree to buy and sell a particular asset of specific quantity and at a predetermined price. For example, the buyer of the futures contract (a long position) agrees on a fixed purchase price to buy the underlying commodity (wheat, gold, beef or oil for example) from the seller at the expiration of the contract. The seller of the futures contract (a short position) agrees to sell the underlying commodity to the buyer at expiration at the fixed sales price. As time passes, the contract’s price changes relative to the fixed price at which the trade was initiated. This creates profits or losses for the trader.


      8. What is a Swap?

A swap is a derivative contract through which two parties exchange financial instruments.  For example, the exchange of two securities, interest rates, or currencies for the mutual benefit of the exchangers.


  1. What is a Corporate Action?

A Corporate Action is an activity initiated by a company that affects the nature and/or quantity of stock that you hold. Corporate actions include both mandatory actions (stock splits, mergers & acquisitions, cash dividends, return of capital) and voluntary actions (tender offers, rights issues, buyback offers). Corporate actions are used to distribute profits to shareholder, influence stock prices, or during mergers/spinoffs to increase company profitability.


  1. What does Mark to Market (MTM) mean?

Mark to Market is the process of daily revaluation of a security to reflect its current market value instead of its acquisition price or book value.  Mutual funds are generally marked to market on a daily basis at the market close.


Close up of man's hands holding digital tablet with reflective touchscreen surface, using high-speed Internet connection to do work as Fund Accountant 

Good Luck with your interview preparation!

For more interview tips  –> Click Here

With over 15 years’ experience in Financial Services working in BNY Mellon, State Street Global Services and Bank Of Ireland, Gillian joined Matrix Recruitment Group to lead the Financial Services recruitment team. If you are looking to source a candidate for a Financial Services role or you’re interested in making a career change yourself, please give Gillian a call on 051 353825 or connect with her on LinkedIn.