BST Awards 2022: Best buy-side performance measurement and attribution product—MSCI

Product: BarraOne

Overview

New York-based MSCI’s multi-asset class suite of performance analytics models are designed to allow buy-side firms to measure, attribute and appraise portfolio performance. A critical part of the investment process is to monitor and explain daily performance of diverse portfolios and strategies. Portfolio managers need actionable insights on what drives the performance within their portfolios and the information to allow them to provide investors with simple and credible explanations regarding the status of their investments.

“With BarraOne’s risk and performance attribution, we achieve adequate granularity to cover relevant return drivers with flexibility to align with different investment processes of our different product groups with various asset classes and strategies. Importantly, the performance drivers are in alignment with the risk factors. We make sure to expose portfolios to degrees and sources of risk that are appropriate for the portfolio objectives.”
Sarah Stutz, head of risk controlling securities, Swiss Life Asset Managers

What problem does it address?  

MSCI has invested in market data, valuation models and risk models for decades. It continually evolves and expands its capabilities to keep pace with market changes and client needs. Its suite of performance analytics is powered by these investments. Granular decomposition of fixed-income and equity asset returns support the front office. Used in combination with top-down analysis of allocation and selection decisions, the firm offers a complete assessment for any overview.

Secret sauce 

MSCI has a clear understanding of the needs of institutional investors and their key teams such as CIOs, portfolio managers and performance teams. It continually invests in BarraOne, the firm’s risk, performance and attribution platform, based on client feedback/insights. Recent highlights include support for ESG and private credit data/markets. 

Recent milestones

  • Ready-to-use fixed-income and multi-asset class performance attribution reports provide actionable insights and facilitate communication with internal and external stakeholders.
  • The possibility of uploading proprietary single-security analytics enables clients to include their proprietary views/models in the analysis.
  • A new distressed debt model separates return decomposition for fixed-income assets with uncertain future cashflows.
“While the breadth and quality of our risk models is widely recognized, we have focused on enhancing our performance attribution capabilities and partnerships to serve the full range of risk and performance needs of buy-side institutions across asset classes and front- and middle-office teams. The growth of our performance attribution client base confirms the strength of our offering. This award is another great validation of our strengths.”
Jorge Mina, managing director, head of MSCI Analytics

Future objectives 

  • MSCI’s performance attribution models are accessible via partnerships with order management systems like Charles River (a State Street subsidiary) and IHS Markit thinkFolio (now part of S&P Global). Portfolio managers can access performance attribution results directly in their order management system.
  • MSCI Insights: Performance attribution results are also available via MSCI’s data warehouse. 
  • MSCI will continue its focus on private assets, ESG and climate to address evolving investment needs.

Why they won 

It’s hard to believe that MSCI’s win in this year’s BST Awards is its first such success, given its standing in the industry―it is the epitome of a household name when it comes to technology and data, especially from a buy-side perspective. This inaugural win comes courtesy of the firm’s BarraOne offering, a risk and performance attribution platform designed to allow users to generate every conceivable risk and performance metric they could wish for. This has become one of the most competitive categories of all 35 on offer since these awards were launched back in 2007, given how central risk, performance and attribution functions are to the buy side. Few would bet against seeing MSCI in the winners’ circle for this category (and others) again next year. 

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