Northern Trust Enhances Performance Attribution Tool

August 27, 2008 ( - Northern Trust has launched an enhanced version of its fixed income performance attribution analytical tool.

According to a press release, Northern Trust’s Investment Risk and Analytical Services (“IRAS”) group has launched an enhanced tool that uses multiple sources and types of fixed income characteristic data to customize attribution analysis for fixed income investments. It is available to clients daily via Passport, Northern Trust’s online institutional-client reporting system.

The tool, which is available globally, is aimed primarily at asset managers to help them pinpoint where performance is coming from in their portfolios’ fixed income holdings. The tool also helps asset owners to better judge decisions made by their chosen asset managers, according to Northern Trust.

The Northern Trust tool uses three main characteristics data categories on which analysis is based:

  • Instrument type
  • Duration data
  • Yield data

For each of these characteristics categories, there are number of measurement criteria, called factors. Northern Trust has added new factors within the duration data category which means that more data can be fed in to the tool to provide more detailed, meaningful performance attribution analysis for fixed income.

“Fixed income is a relatively opaque asset class compared to standard exchange-traded equities and, consequently, it has historically always been harder to obtain detailed, daily performance attribution analysis on fixed income holdings,” said Jim Trotter, head of IRAS in Europe, Middle East and Africa at Northern Trust. “Our new tool is the next generation in fixed income attribution analysis and is completely customizable to meet the requirements of each asset manager client depending on its individual investment process for fixed income.”

Previous, recent announcements from Northern Trust have included the launch of a daily risk monitoring service, the launch of an enhanced compliance monitoring service and the launch of a new custom liability benchmarking service (see  Northern Trust Eases Access to Performance Info ).   More information is available at