I work as an analyst at a boutique mutual fund manager covering mostly European equities. During my review this year, I have been asked to prepare a list of objectives I should be assessed on for the next year in a way that my performance can be measured more objectively.
Do you guys have any ideas, or know of examples of performance measures that I could propose? I bet that those of you working in larger fund managers already have something similar, if you can give me a hand I would be extremely thankful.
Do you have primary research responsibility for these names or are you in a supporting / entry level role? How are they tracking the other analysts' performance?
I have primary research responsibility for the names I cover, yes. I have 2,5 years experience in the role but, as the firm is growing, they have started to look for ways to improve tracking the analysts' performance in a more "formal" way. But until now there has not been any particular way in which other analysts' performance has been tracked.
We use CapitalIQ and Factset to track analyst investment performance. It basically works like a paper portfolio. Whenever I submit a formal recommendation to my PM it goes on my performance sheet. We then track both the absolute and relative performance of the name vs. our product's benchmark. You can probably track the volatility as well, though we don't do this. We do it for both buy and sell recommendations.
The major components of our review are thus 1) average relative performance vs. benchmark for names recommended 2) average absolute performance 3) hit rate. Qualitative factors also come into play, but the quantitative part is quite important especially the longer you've been at the firm.
Great, thanks! And could you share a couple of qualitative factors that are usually considered?
What kind of time periods do they look at? Is it simply annually or like 1, 3, 5?
Do they track you against the broad benchmark or sector/country specific benchmarks?
Thanks again!
We do it every 6 months and then against inception. However, we could easily measure it on other bases (1yr,3yr, 5yr, etc.). There's no one right way.
Broad benchmark in USD performance. We could also easily add performance vs. sectors or countries. However, everyone on my team is a generalist, so this wouldn't necessarily be the best benchmark.
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