Morgan Stanley Wealth Management Launches New Manager Analysis / Scoring Process for Fixed Income

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The FINANCIAL — Morgan Stanley Wealth Management announced on February 16 that it has launched a new manager analysis screening and scoring process for fixed income developed by the Firm’s Global Investment Manager Analysis team (GIMA).

Known as Adverse Active Alpha for fixed income, GIMA believes this process, which extends the methodology from Morgan Stanley’s patented Adverse Active Alpha equity process, can help it better analyze fixed income managers and may increase the odds of selecting those with the potential to excel in the future, according to Morgan Stanley.

“As the ‘adverse’ denotes, one of the keys to the process is finding fixed income managers that have been able to outperform their peer groups in environments that have been unfavorable for active manager relative performance,” said Matthew Rizzo, Morgan Stanley Wealth Management Strategist. “We believe that managers that performed well when conditions were most difficult and were able to do so with a degree of consistency may be more likely to possess investment skill, as opposed to managers that performed well primarily when conditions were in active managers’ favor.”

The active component of the process looks for managers that run portfolios that are truly differentiated from their benchmarks.  By combining the adverse and active components together, the Adverse Active Alpha tool is able to derive a pool of fixed income managers with greater potential for outperformance.

“With the addition of the fixed income Adverse Active Alpha process to the manager selection tool box, Morgan Stanley Wealth Management further extends its offering in manager selection across both equity and fixed income products, which is part of our ongoing efforts to enhance investment results for our financial advisors and their clients,” noted Paul Ricciardelli, Managing Director, Head of Manager Solutions, Co-Head of GIMA.

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Morgan Stanley Wealth Management, a global leader, provides access to a wide range of products and services to individuals, businesses and institutions, including brokerage and investment advisory services, financial and wealth planning, cash management and lending products and services, annuities and insurance, retirement and trust services. 


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