Fixed Income @ Morgan Stanley - S&T vs Research
I'm trying to understand the differences between Morgan Stanley's "Fixed Income Research" and "S&T Fixed Income" roles, specifically comparing the New York and London offices. How do these positions stack up against Global Capital Markets?
Also curious about return offer rates for summer analysts across these desks, and whether there are notable differences in exit opportunities to global macro hedge funds, thinking of places like Fixed Income and Macro at Citadel, Oculus at D. E. Shaw, and similar shops.
My rough understanding is:
- Fixed Income Research people spend most of their time on quantitative modeling and macro analysis—building yield curve models, analyzing monetary policy impacts, and producing investment recommendations for portfolio managers. The work is cerebral and independent, with flexible deadlines and projects spanning weeks to months. Days involve modeling disconnects in asset classes, writing research memos, and presenting findings to internal teams. Exit opportunities are narrower compared to S&T, with more on buy-side credit research at asset managers.
- S&T's Fixed Income product teams operate on the trading floor with completely different demands. Trading roles involve making markets, executing client trades, managing risk exposure throughout the day, and calculating daily P&L before leaving. Sales professionals facilitate transactions for institutional clients, pitch trade ideas, and maintain relationships with macro hedge funds and asset managers. S&T has better comps, is more performance-driven, and better exit options.
Would appreciate any brief insights or perspectives from those familiar with these roles. Thanks in advance!
yeah pretty much. Research obviously doesn't touch live flow and doesn't interact with clients nearly as much as FO S&T. The core diffrence as you've alr descirbed is Research is spending extended period of times producing analysis on broader market trends. That research than gets used by Sales to convince clients to make trades or buy certain house assets etc. - Traders will also get exposure to research and are expected to integrate their analysis into how they structure their book.
And yes without a doubt Research will be more cerebral for those that are more inclined towards academic-ish analysis and producing longer form deliverables with more real substance. S&T is all client and flow centric, Sales is all about turning that long form research into directionally actionable trades with entry/exit/notional etc. - Sales can and will be wrong on a lot of stuff but that doesn't really matter, it's all aboutt being able to convince clients you're right or pitching the right trade for them (ie. A client has a ton of expsoure on an asset that most of the market is long, sales pitches a trade to hedge that exposure - probably will never pay off but its a risk management move not a fundamental investment decision (core differentiator). Which is truly a harder job? Sales most likely. Lots more pressure coming from multiple stakeholders.
In terms of exit opps, I would say Research has pretty good exit opps to Hedge Funds and generally to the buy side. What research is doing is in a way more aligned with what an Equity L/S HF PM does than what an Equity Sales Trader does, as it's all about fundamental sector analysis and making bets that are either right or wrong. Going in depth pays off far more than having a broad knowledge of products and trends like a Equity S&T guy would have.
Fixed Income is a different story though, FI and Macro S&T guys have a way easier time moving over to Hedge Funds because running a macro pod is fundamentally different than equities. It's far more about running a book thats producing uncorrelated returns to the market, and that at its core is pure risk management and hedging intuition. Very few Macro guys are making fundamental bets on where the market is going, it's all about holding steady through the economies ups and downs. Equities is moreso return focused, not to say they aren't also producing un correlated returns, but the way they operate is about having depth in a sector and making bets on it - aligning directly with what Research does.
I wouldn't really word it like this. lots of people on the floor think research has their heads up their ass. theres no expectation that sales pushes the research and/or traders position on the house view. they are running similar but fundamentally different businesses
If what you described here sounds particularly appealing to me, does that suggest S&T, especially the more macro-oriented desks, might be a good fit? And are there other fields with a similar dynamic?
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