Role of technological solutions in data management and analysis tools
For a long time, portfolio managers have had to rely on brokers for research and on themselves for performance analytics. In a way, finance has been disrupted much later than other industries, which had to evolve much sooner.
Now things are moving quickly, regulation is radically changing the investment environment. We are seeing a gap opening due to technological solutions in data management and analysis tools, with some managers having sophisticated analytics while others still rely on spreadsheets or inaccurate, approximative solutions. As time passes, those with access to the best technologies will leap ahead of the rest creating an incredibly uneven playing field.
At Quantilia, we are on a mission to level out the investment game once more.
Accurate knowledge of the past and appropriate predictions of the future
Such a difference would make any well technologically-equipped portfolio management team look like a Goliath compared to others, widening the gap between companies.
On a basic level, how can you efficiently manage your portfolio if you cannot run proper performance analysis to understand the past and assess the impact of forthcoming events on your positions?
Portfolio management requires thorough and accurate knowledge of the past and appropriate predictions of the future in order to remain successful in the short- and long-term.
There are two main types of performance analysis:
– ex post: studying past performances by market, asset class, sector, etc.
– ex ante: looking at forecasts instead of past results
This same logic applies to the finance world and can make all the difference when it comes to successfully managing your portfolio. It is key for a portfolio manager who is investing in a wide range of stocks, bonds, funds, ETFs or derivatives to understand the key drivers of their past and future performance.
Having the best equipment at hand – the key to successful management of portfolio
Whilst a risk analysis details the contribution to the overall volatility of VaR of the portfolio, the performance analysis looks at the positions as performance engines and is able to deliver or limit the portfolio’s financial objectives. Risk and performance analyses can make or break a portfolio, so it is imperative that portfolio managers have the best equipment at hand in order to make the best decisions at every juncture.
Such a key instrument should not only be given to top hedge funds or leading institutions, but should be available to any institutional investor, regardless of their size. As they compete on the same markets, trading the same securities, their tools should also be similar.
Have we ever seen sports players having different rules according to the team they play with? This seems like a ludicrous idea, so why should portfolio management be any different? It is vital to the investment industry as a whole that all institutions have access to the same quality of performance analysis tools.
How would a boat captain navigate in the high seas during a foggy day if he could not rely on his compass and other tools?
Likewise, a portfolio manager needs an accurate way to assess ex ante the new tracking error that its portfolio will have after a new trade is executed, in order to more precisely determine its performance attribution based on Brinson-Fachler methodology, as well as to calculate its new exposure to multi-asset market factors such as inflation, emerging markets, or political risks. Portfolios are only as successful as their managers, and with the proper tools, any institution, big or small, has the opportunity to consistently outperform the industry standards.
Quantilia’s wide range of performance analytics tools
Quantilia now provides a wide range of performance analytics tools, both accurate and affordable, while still remaining as evolutive and scalable as all our solutions are.
For example, our Market Screener is able to assist portfolio managers in detecting trends and outliers and determining how these factors will impact their businesses. Running so many numbers by hand would take hours of unnecessary hassle, struggle, and stress.
Quantilia’s guaranteed tools are able to make accurate predictions and help portfolio managers keep track of every single piece of information with just a click, saving time and effort while producing superior results time after time.
Quantilia firmly believes that the size of an institution should not determine the availability of quality products. Just because an operation is relatively small does not mean that their individual needs are less important than the top companies.
We are dedicated to providing quality tools that will lead to success without breaking the bank.
Quantilia gives you the tools to get the absolute most out of your institution, allowing you to learn from the past and plan for the future.