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A New Way to Judge the Buyside

MSIM overhauls trading performance metrics

Traders Magazine, March 2009

Nina Mehta

In the quantitative world of finance, evaluating the performance of traders has long been an important but elusive task. Now, as the buyside does more self-directed trading, it's becoming even more important to assess how well traders do their job and how much money this puts in the pockets of fund owners. Clear answers aren't easy to come by. But Morgan Stanley Investment Management is currently implementing a framework it believes will quantify the value a trader delivers to the firm's investment process. MSIM, which plans to compensate traders based, in part, on the numbers that emerge from its calculations, hopes other firms will embrace a similar methodology to bring more rigor to the trading discipline.

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