These are dark days for securities analysts. Financial markets around the globe are weak; stock picking is treacherous.

By David Schutt
August 2001
Institutional Investor Magazine

And equity analysts' credibility is under attack as never before. In the U.S., media outlets and government bodies are scrutinizing the inherent conflicts in sell-side research. These include analysts' owning stock in companies they cover and writing reports on firms their banking colleagues are pressing for business.

Given the controversy over today's sell-side research practices, it's worth restating an equity analyst's original brief: to select worthwhile investments. Perhaps no group is filling this mission more ably than the analysts profiled in this month's cover story, "The Best of the Buy Side." For the first time, Institutional Investor is honoring 25 of Europe's top analysts who work for money managers (we've spotlighted the U.S.'s best buy-side researchers at various times since 1979). As European companies, investors and employees become more dependent on the equity markets, buy-side analysts are growing in number and influence, yet little is known about them. This month our readers get a closer peek.

Free of the investment banking and marketing chores that weigh so heavily on sell-side analysts, these buy-side researchers have been able to make some remarkably prescient picks in the past year or two. They've also managed to avoid - or at least quickly dispose of - some of the market's worst performers, by following their instincts.

Elsewhere in this issue, we highlight the accomplishments of another band of often-overlooked researchers, fixed-income analysts. Not only is our All-America Fixed-Income Research Team celebrating its tenth anniversary, but its market is riding a hot streak: Bonds outperformed stocks last year and appear poised to do so again this year. Similar to their buy-side colleagues, these analysts succeeded by shrewdly selecting the best investments and nimbly sidestepping the worst.