Large money managers are most often turning to Bloomberg, typically called a Bloomberg box, to analyze securities in today's record-breaking bull markets, a Pensions & Investments survey shows.
Besides the Bloomberg service, offered by Bloomberg Inc., New York, many managers said they are analyzing securities using the database access software FactSet, a product of FactSet Research Systems Inc., Greenwich, Conn.; the research delivery product FIRST CALL, from Thomson Financial Services, Boston; and the fixed-income portfolio analysis product BondEdge for Windows, a product of Capital Management Sciences Inc., Los Angeles.
For portfolio management, the survey found managers frequently use the portfolio accounting software Axys, from Advent Software Inc., San Francisco; portfolio analysis software products from BARRA Inc., Berkeley, Calif.; the multi-faceted products from Bridge Information Systems Inc., St. Louis; and the portfolio accounting software PORTIA, Thomson Investment Software, Boston.
Those were the findings of a P&I telephone survey of 40 domestic and international equity and fixed-income managers with about $894 billion in total assets under management. The managers were asked about what non-proprietary software they primarily use to analyze securities and manage portfolios.
LEADING ANALYSIS TOOL
Some 37% of the managers listed Bloomberg as one of their first choices for analyzing securities. The Bloomberg service is known for offering worldwide, real-time financial information on news, data and financial markets analysis.
No other commercially available product came close to Bloomberg's popularity as a security analysis tool. The percentage of managers identifying Bloomberg as their most popular security analysis tool was 12 percentage points ahead of the next most popular product, FactSet.
Michael Bloomberg, president of Bloomberg Inc., claims his service is the definitive source for data on securities information and market statistics, indices and research. Based on the survey responses of what commercial software money managers actually use, he might be right.
Bloomberg "is the industry standard," said Seth Ruskin, a portfolio analyst with Jacobs Asset Management, Fort Lauderdale Fla. A medium-size international value equity manager, Jacobs uses Bloomberg because it gives you "really a lot of detail," said Mr. Ruskin.
He said his firm, about $400 million under management, can get information about many small, illiquid emerging stocks from places as remote as Russia and Brazil that it can't get anywhere else, said Mr. Ruskin.
Reuters America Inc., New York, offers a product somewhat similar to Bloomberg, such as data, news, research, analytics and trading services. However, only one manager in the survey identified it as a non-proprietary source for security analysis.
On a global basis, however, (a question that wasn't specifically asked in the survey) Reuters might have had a much stronger showing because of its strength in global services and wider use outside the U.S.
FactSet, the second most popular analysis software tool in the survey, was identified by 25% of the managers surveyed. The product offers a broad variety of financial market and economic information. Its library of databases includes fundamental data on more than 20,000 companies worldwide.
FactSet combines multiple database on a mainframe computer. Clients can access it through their personal computers.
In March, FactSet reported that it had 521 clients, a 35% gain over the previous year. It also said its clients had 12,000 active passwords, a 50% gain over the previous year.
Mr. Ruskin described it as a "easy-to-use" software front-end to research services like Worldscope and Compustat.
Some 17.5% of the managers listed FIRST CALL as important software for analyzing securities. It electronically delivers real-time, commingled research, earnings estimates and corporate information.
First Call reports that it is used by 4,500 financial institutions. First Call products include FIRST CALL Research Direct, full-text original research reports.
Some 12.5% of the managers interviewed said they use BondEdge for Windows for securities analysis. BondEdge concentrates on fixed-income analysis. The percentage probably would have been higher had the survey been limited only to fixed-income managers.
"I think BondEdge is good and the best system out there at the total portfolio level," said a bond portfolio manager who works at a major money management firm that participated in the survey. He didn't want to be identified.
The manager said he wished BondEdge had a better help desk. He said that the "help desk is unbelievable" for a competing product of BondEdge, the Yield Book product offered by Salomon Smith Barney Analytics Inc, New York. He said the help desk was very knowledgeable and that Yield Book is a "quite flexible" system with an "enormous and accurate" database.
While Yield Book was very good at analyzing individual securities, he found Yield Book didn't have the capabilities BondEdge did at analyzing total portfolios. A portfolio manager using BondEdge, he said, can replicate a portfolio through time, an essential function needed to model portfolios through the passage of time.
In response to criticisms about the kind of help CMS offers clients, CMS is adding to the kind of help it provides, according to Teri Geske, vice president for product development at CMS.
CMS had primarily given help on technical questions about how to operate the software at what is calls its help desk. Help desk staffers answer client telephone calls about using CMS software. Now CMS is in the process of adding people who can offer help in analyzing portfolios, such as questions about convexity of a portfolio, said Ms. Geske.
Some 10% of the managers listed Bridge Information Systems Inc., New York, as important to them in security analysis and an equal percentage listed BARRA Inc. Bridge provides news, security prices, trading software and a variety of market data.
Bridge's BridgeStation product provides information on 1.4 million securities from more than 1,000 security exchanges. It provides data on equities, fixed income, derivatives, foreign exchange and other areas.
BARRA Inc., Berkeley, Calif., software provides portfolio management, investment data, trading services, market information and investment research. It provides multiple factor models for risk, returns and transaction costs on global securities.
ADVENT A LEADER
For portfolio management, some 30% of the money managers surveyed said they are most often turning to Advent Software Inc., San Francisco, software. Axys, Advent's portfolio management software, is used by 17.5% of managers responding.
Another 10% said they are using Moxy, Advent's trade and order management software. One manager said he is using Advent's Qube, software for client contact and relationship management.
Jacobs Asset Management uses both Advent and Moxy. Mr. Ruskin said Axys is "really a good product" at a fair price. Moxy, he said, "is very neat. It figures out portfolio percentages. Let's say you want a 2 percent position across the board in all your portfolios. It figures out everything for you . . . and you just place your order."
Also, 15% of managers also use FactSet software for portfolio management. An equal percentage of the managers, 12.5%, said they use Thomson Investment Software, Boston, PORTIA portfolio management and accounting software and BARRA software for portfolio management. Another 10% said they use BondEdge for Windows, and 10% said they use Sungard's Shaw Data portfolio management software. Smaller percentages reported using Bridge, First Call and Wilshire Associates Inc.'s Quantum series of software products for portfolio management.