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With this dashboard, KeeSystem meets the needs of asset management professionals by providing them with a global view of the risks of each portfolio, thus enabling them to make better analysis and investment decisions.

 

A particularly useful tool in these times of increased volatility on the financial markets!

 

As the risk-return trade-off is at the heart of investment decisions, this new dashboard is a natural follow-up to the improved performance indicators in KeeSense since spring 2022.

 

This solution provides portfolio managers and financial advisors with the necessary tools to implement and monitor investment and risk management strategies.

 

The specification was to offer a global and synthetic view of the risks of each portfolio, including all the indicators and graphical representations useful for the managers’ decision, while relying of course on the user experience in the product design.

 

For the functional aspects, KeeSystem called on a recognized professional in the field, Thierry Crovetto, Founder of TC Stratégie Financière. He assists asset managers and family offices in the analysis of funds and portfolios, the monitoring of risks, the optimization of the risk adjusted return  of portfolios. He is also a professor of Finance at the IUM and offers training in the financial fields.

 

According to Thierry Crovetto, “this Risk dashboard is essential since the most important thing in asset management is the control and monitoring of risks. The classification of the components of a portfolio is not enough to assess its risk, this beginning of the year brings the perfect illustration…”

 

 

 

A complete solution to measure risk and support decision support

 

In the Finance view of each portfolio, the client can set the observation periods that will be used for the calculation of the various ratios and indicators, in the example below for periods of 6 months, 1 and 2 years.

 

Performance measures

 

KeeSense displays the performance measure for each period, as well as the graphical representation of the cumulative performance and the variation of the performance.

 

By going to the Performance tab, the user benefits from a detailed analysis of the performance contribution of the assets, classified according to several criteria: asset classes, currencies, duration, countries, economic sectors.

 

Risk-adjusted ratios

 

In addition to the usual Sharpe ratio, which measures risk-adjusted relative returns by treating both upside and downside risks equally, KeeSense calculates the Sortino ratio, which is an improvement of the Sharpe ratio as it determines the additional return for each unit of downside risk. Therefore this risk-adjustment metric provides an more accurate rate of return given the likelihood of downside risk.

 

It also includes two other crucial indicators. First, the Calmar ratio, which calculates the efficiency of an investment on a risk-adjusted basis related to the risk of drawdown. And also the Sterling ratio, which quantifies investment performance by comparing periodic returns to periodic drawdowns. The approach here is to evaluate risk as being a direct representation of an investment’s average maximum drawdown.

 

Risk Indicators

 

KeeSense also provides the user with the indicators and graphic representation of the volatility, negative deviation, beta equities, maximum drawdown and average drawdown. The beauty of the system is that, for each indicator, the client has the opportunity to compare portfolios having the same investment profile, represented graphicly in the form of a scatter plot, thus highlighting possible portfolios dispersion.

 

Value at Risk & Conditional Value at Risk

 

The solution determines the VaR and CVaR across 95% and 99% confidence levels to calculate the maximum expected loss. This is major data useful for the discussion between a portfolio manager and his/her client as well as a data measure requested by the regulators. While the VaR represents a worst-case loss associated with a probability and a time horizon, the CVaR is even more useful as it is the expected loss if that worst-case threshold is ever crossed.

 

Synthetic Risk and Reward Indicator (SRRI)

 

KeeSense calculates the SRRI, the risk measure that was introduced by the European Commission for investments funds as part of the UCITS with the objective to get a simple risk-reward appreciation. The SRRI indicates the level of portfolio risk by providing a number from 1 to 7, 1 representing a low risk and 7 a high risk.

 

With all the collaborative and alerting features!

 

As always in our KeeSense solution, users have the possibility to set alert thresholds as well as the way they want to be informed, either in the dashboard, in their control actions or by receiving an email for example. As the parameterization of our solution is at the heart of the software architecture, there is no limit!

 

The collaborative function, which is very much appreciated by our clients, allows tasks to be assigned to other team members, enabling stakeholders (i.e. portfolio manager, risk manager, relationship manager, etc.) to share information efficiently and to discuss actions to be taken. This functionality, associated with the Risk dashboard, ensures greater efficiency in the pro-activity and reactivity in the management of portfolio risks and exchanges with clients.

 

5 key benefits of KeeSense Risk Management Dashboard

 

  • Full picture of the risks: this state-of-the-art dashboard provides users with a simple, centralized and effective way to measure portfolio risks.

 

  • Portfolio managers can make better and faster analysis and investment decisions, thus turning risks into opportunities to optimize portfolio management.

 

  • Improved transparency and client engagement with investment management and reporting based on accurate risk measures adapted to clients’ financial personality and investment mandate.

 

  • Comply with regulation with effective risk management including stress test and expected loss, and simple risk reporting to client.

 

  • The all-in-one philosophy: like all features into KeeSense, this dashboard is fully integrated to the system and benefits from all the collaborative features.

 

As explained by Pierre-Alexandre Rousselot (CEO, KeeSystem),  “This Risk dashboard is the natural continuation of the recent developments of our KeeSense solution, our goal remaining to always facilitate the daily life of our customers. And risk management is particularly topical! In the same way as we accompany the ongoing digitalization of our clients in wealth management, asset management, family offices and private banks, we continue to improve our value proposition every day. And working with experts in the ecosystem, such as Thierry Crovetto on the subject of risk, is the best way to progress and create value for our clients”.

 

Learn more about KeeSense Portfolio Risk Management and Compliance.