Fixed income portfolio management and analytics

Transcription

1 Fixed income portfolio management and analytics Solution insight Fixed income portfolio management and analytics Obtain a unified view of the investment process to make timely and informed trading decisions

2 A decision support tool that is part of a strategic solution How do you profit from the shifts within fixed income markets and meet the complex analytical needs of a liability-matching strategy?

3 Fixed income: a growing asset class Although the investment management sector is showing strong growth, the constant search for returns is forcing diversification of investment strategies and competition is driving change throughout the industry. Overall inflows towards fixed income portfolios remain modest, with most of the movement coming from a shift from traditional strategies to specialties or passive management. With new regulations incurring additional costs, the global profit pool is under pressure. To increase market share while keeping margins at a healthy level, fixed income asset managers must have the right tools at hand to make faster and better decisions. Find sources of return in a low-yield environment. With short-term interest rates in the developed world likely to remain low for the foreseeable future, the search for returns will continue. Fixed income asset managers must balance the need for improved performance with maintaining a firm grip on their risk management practices. Sound analytics are of prime importance to achieve a consistent view of risk across the entire portfolio. Attracting new flows and increasing market share. Many investment managers are expanding their offering by adding new solutions, passive management and alternative investment to traditional active portfolio management. Liability-driven investment (LDI) will also continue to play an important role, as pension funds seek to match the growth in their long-term benefit commitments. Against this backdrop, analytics are becoming more important than ever. Increasing regulatory burden. Asset managers need to obtain a single, consolidated view across multiple portfolios, particularly when running multiple mandates. But having the ability to run pre-trade checks to be compliant with UCITS and AIFMD or regulation and client guidelines increases efficiency and can also prevent costly readjustments. Misys FusionInvest Fixed income portfolio management and analytics 3

4 Investment Management great opportunities, growing challenges The global asset management industry is enjoying sustained growth, with net asset flows and industry profits showing strong gains. But, with interest rates remaining low, the search for returns continues to intensify and there are other disruptive forces to consider across the industry. Changing investor preferences Investors are more demanding than ever and have developed a taste for non-traditional assets. Persistently low interest rates have created a general appetite for specialties, multiasset investing and solutions that are specifically orientated to investor needs, beyond performance relative to a specific benchmark. Overall, global markets continue to shift away from actively managed assets, so managers that maintain a strategy that is focused solely on traditional assets will continue to be squeezed. Increased competition Customers are now better informed than ever before and also have greater choice then ever. Asset managers must position themselves as innovative solutions providers in order to attract new funds. While they could formerly sell products, they now have to work much harder to provide a bespoke service to meet specific needs for both institutional and retail clients. Institutional investors are also demanding greater transparency, which calls for more flexible real-time data and analytics. The need for a new approach New market entrants are forcing the pace of change throughout the industry, which is squeezing management industry fees and, although there is continued growth in fixed income and passive strategies, many of these are low-margin as a result of increasing product standardisation. The evolving dynamics of global investment management calls for a new approach to data operating models and technology. In the past, investment managers could operate by making incremental changes to systems and processes, but now a more systematic, strategic approach is essential. Every investment management firm requires an operating model that can fulfil its strategic ambitions whilst accommodating the disruptive forces that are affecting the entire industry. A growing regulatory burden The burgeoning body of financial regulation continues to increase in both volume and complexity across all markets. This compliance burden increases the cost of doing business and intensifies operational complexity. As well as posing an operational challenge, the increasing regulatory burden has strategic consequences, for example on product innovation and international growth. As such, meeting regulatory requirements in a new market must be thoroughly evaluated ahead of market entry. 35 % 70 % 60 % An integrated front-office platform reduces the working time for portfolio managers by up to 35%, allowing them to focus on more added value activities that generate higher returns* Having portfolio and risk management, analytics and compliance in a single system can ultimately negate up to 70% of a firm s interfaces* By introducing new strategies and solutions via FusionInvest, on average our customers have experienced a 60% increase in their customer base* * Based on customer interviews carried out by the Misys Customer Value Team 4 Misys FusionInvest Fixed income portfolio management and analytics

5 Misys FusionInvest: a best-of-breed portfolio management and decision support tool that puts you in full control Fixed income is a growing asset class and an integral part of new solutions such as asset allocation and LDI strategies. It remains the deepest asset class offering a broad range of diversification and return opportunities. But a successful fixed income strategy relies strongly on analytics. FusionInvest is a comprehensive portfolio management system with integrated decision support tools that provide comprehensive fixed income analytics throughout the trade lifecycle. Comprehensive coverage With the current low yield environment, managers need to diversify to remain competitive and increase market share. FusionInvest provides a broad range of fixed income coverage that can be integrated with other asset classes to provide a consistent view across a portfolio. FusionInvest computes all of the required analytics, including yields, durations and key-rate durations (KRD) on portfolios, benchmarks and simulated trades. Misys consistently works with its clients to increase the range of analytics and asset class coverage so you can seize new opportunities and stay ahead of the competition. Attract new flows As investors turn away from traditional strategies, new flows increasingly go to specialists, solutions providers and non-traditional asset managers. Those managers with the tools and systems in place to handle the evolving complexities of new investment techniques will be well placed to seize new opportunities, win market share and grow. FusionInvest can help you to extend your offer into the areas where the inflows are. Our broad asset class coverage is combined with tools for automatic rebalancing to support passive management, and hybrid portfolio solutions, such as asset allocation and LDI. Turn regulation into an opportunity With regulation affecting all aspects of the investment management process, its potential impact must be evaluated as part of any trading strategy. FusionInvest ensures you are not constrained by continuing waves of regulation. Our flexible architecture is designed to meet the most onerous of regulatory challenges, and includes a compliance engine compatible with UCITS and AIFMD requirements. In addition, we provide standard reporting to trade repositories, in order to minimise your costs induced by EMIR and Dodd-Frank when trading derivatives. Misys FusionInvest Fixed income portfolio management and analytics 5

6 Misys FusionInvest FusionInvest combines comprehensive portfolio management tools and powerful analytics that cover the entire investment process from trade simulation and risk impact to order initiation, pre-trade compliance and trade processing in a single system. In this way it boosts efficiency, whilst reducing the risk of trading errors and improving usability. The core functionality of FusionInvest offers all the benefits of a best-of-breed fixed income portfolio management system as part of an integrated frontoffice solution. Flexible portfolio management Real time Portfolio management Modelling and rebalancing Benchmarking Order generation Position keeping, from position refresh to IBOR Valuation User-friendly Highly flexible portfolios and user interface Customisable Views Parameters Data sets Award-winning risk analytics Real-time consolidation of NAV, P&L and risk by multiple criteria including position, portfolio, sub-portfolio, issuer, rating, sector, currency and underlying. Comprehensive integrated risk analytics, including tracking error ex-ante and ex-post, risk matrix, what-if scenarios, stress tests and VaR. Real-time mark to market valuation and credit exposure of instruments, netting, guarantees, collateral and credit derivatives. Fully integrated compliance engine Pre-trade compliance Post-trade compliance Alert workflow management Compliance rule builder Standardised local rules Easily configurable custom rules Advanced reporting tools. Investment book of record (IBOR) FusionInvest offers a real-time data backbone that drives all other business components. The system is built on a robust IBOR and offers a single version of the truth based on trades and events while supporting multiple views: Accounting view Custody view Multi-asset and cash As part of a larger, strategic solution, FusionInvest offers a holistic view of the investment management process so you can see everything in one place and make easier, faster and betterinformed decisions. Performance attribution Performance attribution is a key component of the investment process. FusionInvest provides an easy way of calculating and attributing fixed income portfolio performance, by enabling the computation of return contributions for both the fund and benchmark, and running a full performance attribution analysis. 6 Misys FusionInvest Fixed income portfolio management and analytics

7 Proven, award-winning solutions MENA Fund Manager Awards 2015 Winner: Best OMS Provider IAIR Awards 2015 Winner: Best Company for Leadership in Investment Management & Risk Solutions HFM Week Hedge Fund Services Awards 2014 Winner: Best Technology Overall Risk Technology Ranking 2013 Overall Winner: Enterprise Risk Management Winner: Trading Systems Equities Winner: Trading Systems Forex Winner: Trading Systems Rates Winner: Pricing and Analytics Equities Winner: Liquidity Risk Management Winner: Regulatory Compliance Winner: Reporting, and System Support & Implementation HFM Week Hedge Fund Services Awards 2013 Winner: Best Portfolio Management Software Provider Winner: Best Risk Management Technology Provider Highly Commended: Best Technology for Small and Start-up Firms Structured Products Technology Rankings 2013 Number One Trading System - Credit Number One Trading System - Cross Asset Number One Trading System - Foreign Exchange Number One Trading System - Rates Number One Risk Management - Collateral Management Buy-Side Technology Awards 2013 Winner: Best Buy-Side Commodities Trading Platform/Service

8 About Misys Misys is at the forefront of the financial software industry, providing the broadest portfolio of banking, capital markets, investment management and risk solutions available on the market. With more than 2,000 customers in 130 countries our team of domain experts, combined with our partner eco-system, have an unparalleled ability to address industry requirements at both a global and local level. We connect systems, collect data and create intelligent information to drive smarter business decisions. To learn more about how our Fusion software portfolio can deliver a holistic view of your operations, and help you to solve your most complex challenges, please visit misys.com and follow on Twitter. Corporate headquarters One Kingdom Street Paddington London W2 6B United Kingdom T Misys and the Misys globe mark are trade marks of the Misys group companies Misys. All rights reserved.