BST Awards 2023: Best buy-side performance measurement and attribution product—MSCI

Product: BarraOne

Overview

MSCI’s multi-asset class performance analytics models enable measurement, attribution, and appraisal of portfolio performance. Portfolio managers need actionable insights that explain their portfolios’ performance and a straightforward and credible explanation for their investors. MSCI’s solutions are designed to help its clients monitor and explain daily performance of diverse portfolios and strategies, which is critical to their investment process.

We appreciate MSCI solutions starting from the interface, which is an excellent compromise between simplicity and flexibility. It offers extensive possibilities for customization, in a context that guides the user while maintaining clarity. Analytical features are powerful and dynamic. MSCI factor models allow a powerful and synthetic representation of performance and risk drivers. Great granularity and transparency on all underlying details is also always available.”
Simone Frigerio, head of risk management, BCC Risparmio & Previdenza

The solution  

MSCI’s risk and performance analytics, underpinned by decades of investment in market data, risk and valuation models, are continuously enhanced and expanded to keep pace with market changes and clients’ needs. Granular decomposition of fixed-income and equity asset returns support the front office. Combined with top-down analysis of allocation and selection decisions, MSCI supports complete assessment for any overview. It provides access through dedicated dashboards, APIs, and directly via order management system (OMS) partners.

Secret sauce 

MSCI views its differentiation through its ability to offer an integrated risk and performance solution, enabling clients to better understand contribution of investment ideas to portfolio performance, increase collaboration between the front and middle office, and lower total cost of ownership. The firm focuses on enabling clients to understand the impact of ESG and climate on portfolio performance, including private assets in the analysis, and offers unique features such as distressed debt handling.

Recent milestones

  • Portfolio managers can now access MSCI performance attribution dashboard results directly in their OMSs like Charles River.
  • Performance attribution results can now be made available in a cloud-based data warehouse powered by Snowflake. MSCI offers curated sets of dashboards delivering actionable insights on top of this infrastructure.
  • MSCI achieved increased accuracy and granularity of explaining return drivers of tender option bonds by developing dedicated pricing, risk, and attribution models.
We see an increasing demand for a single solution that explains key drivers of portfolio risk and return. A second consecutive win in this category is testament to our leadership in this space, which is powered by innovations such as the attribution of changes in a portfolio’s carbon intensity due to underlying drivers, and the integration of private assets into performance attribution analysis.”
Lee Phillips, head of Emea analytics client coverage, MSCI

Future objectives 

  • With the recent acquisition of Burgiss, MSCI will continue to strengthen its focus on private assets with coverage of private asset data at the fund, holding, and portfolio company level.
  • The firm will enhance its multi-portfolio attribution models, allowing clients to generate more granular insight into asset allocation decisions by attributing returns to two sources of deviations.
  • MSCI will continue to develop its framework that attributes changes in portfolio-level emissions to their primary drivers.

Why they won

MSCI follows up its win in this category last year by winning it again, thanks to its outstanding BarraOne risk and performance measurement and attribution platform, designed to support buy-side firms in the extrapolation of risk and performance measures across a range of asset classes. While making the most judicious investment decisions might be the single most important function for buy-side firms, measuring the performance of those decisions across portfolios and attributing that performance―good, bad or indifferent―to specific parts of portfolios is arguably their second most important function. Not only does BarraOne support clients in these pursuits, but its data and analytics tools and models make such endeavors not only possible, but accurate, transparent, and reliable too. 

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