Buy Side

buy side

The portion of the securities business in which institutional orders originate. In most instances, the buy side is limited to institutional buyers such as pension-fund portfolio managers. Individual investors are usually excluded from the buy side because they are not considered formal participants in the securities business. Compare sell side.

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Buy side. Institutional money managers, such as mutual funds, pension funds, and endowments, are the buy side of Wall Street.

Buy-side institutions use proprietary research to make investments for the portfolios they manage and don't interact with or make recommendations to individual investors.

In contrast, sell-side institutions such as brokerage firms act as agents for individual investors when they buy and sell securities, and make their research available to their clients.

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Buy Side

What Does Buy Side Mean?

The institutional side of Wall Street that tends to buy large portions of securities for money-management purposes: mutual funds, pension funds, and insurance firms. The buy side is the opposite of the sell side; it provides research and recommendations for upgrades, downgrades, target prices, and opinions to the public market. Together, the buy side and the sell side make up the two sides of institutional Wall Street.

Investopedia explains Buy Side

As an example, a buy-side analyst typically works in a nonbrokerage firm (mutual fund or pension fund) and provides research and recommendations exclusively for the benefit of the company's own money managers (as opposed to individual investors). Unlike sellside recommendations, which are meant for the public, buy-side recommendations are not available to anyone outside the firm. In fact, if a buy-side analyst stumbles upon a formula, vision, or approach that works, it is kept secret.

Related Terms:
• Investment Bank
• Mutual Fund
• No-Load Fund
• Portfolio
• Security