Wilshire Associates Incorporated (Wilshire), a global financial services firm, has launched Wilshire Omnia, a single platform for "comprehensive portfolio risk analysis, attribution and performance measurement across markets and asset classes".
Wilshire Omnia is aimed at streamlining the investment decision process through multi-asset class analytics, and "an intuitive user experience" including security-level risk characteristics and reporting for more than three million securities.
Managing investment risk successfully in today's markets requires the ability to monitor multiple factors with a robust set of analytics that can be accessed quickly, securely and in user-friendly formats that enhance workflow needs, according to Cecilia Loo (pictured), president of Wilshire Analytics.
"In the past the focus was on individual asset classes mainly around fixed income and equities, and the whole market had a single-asset class approach, but the changes in economic cycles and demographics as well as the low interest rate environment over the last few years, has resulted in market participants having to look beyond the standard asset classes approach to generate alpha," said Loo.
Wilshire Omnia is designed to help clients "maximize returns and mitigate risk", and further enhances Wilshire Analytics' "offering of innovative solutions that are uniquely positioned to understand and meet the needs of money managers, money owners and investment services providers in the areas of risk, attribution, performance and portfolio construction".
"Our experience in the fixed income and equities segment has enabled us to take the analytics we have developed over the last 40 years and integrate them in a single end-to-end platform that encompasses a multi-asset class set up including derivatives, exchange-trade products (ETFs), and other instruments that were marginal in the past," said Loo.
The key for this development is the data as you need a strong foundation to provide comprehensive risk and analytics, but also the feedback we got from our steering committee which is comprised of global clients with representation across different company types in the sell- (investment banks) and the buy-side (asset managers, central and custodian banks), and end-investors, according to Sandro Fusco, managing director at Wilshire Analytics.
"Wilshere has spent the last five years developing Omnia," said Fusco. "This is how we realised that there was a need for cross-asset coverage, ease of use, end-to-end analytics and central hosting."
According to Fusco, there are many drivers for the increased demand for cross-asset coverage which can depend on the market environment but also on client needs. "The increased use of cross-asset investment strategies and products, is requiring a space where clients can create reports about performance but also about the characteristics of those products and strategies in a way that is easy to understand and navigate," he said.
Some of the characteristics of Wilshire Omnia include multi-asset class coverage of global equities and fixed income, as well as commodities, derivatives, FX products, alternatives, and constituent-level drill-down for mutual funds and ETFs; transaction-based, holdings-based or flow-based global performance measurement capabilities; integrated industry-recognized factor models that measure portfolio performance and risk (in absolute terms or versus a benchmark); and global factor risk decomposition for cross-asset portfolios and funds.
The launch of the platform is also a response to increasing demand for an open architecture approach from product providers and investors, said Loo. "Portfolio construction and risk analytics are a key part of this development but we have also plans to look into liquidity and credit risk to complement the platform, and we think these elements will make Wilshire Omnia a must-have tool for market players," said Loo.
In addition, the new platform offers the ability to slice and dice portfolios and funds to quickly gauge allocations across groups, and drill down to trade level; a multi-layered fund construction functionality; multi portfolio views for C-level reporting tools and easy comparison across different portfolio managers. The platform will also provide access to Wilshire-maintained data warehouse with cross-asset security master and most commonly used benchmarks.
Wilshere said hundreds of existing clients and Wilshire business units currently utilise the underlying models, data and analytical engines within Wilshire Omnia which shows that this kind of functionality is also showing the cross-over between the sell- and buy-sides, where product issuers and distributors want to have a whole picture of the life cycle of investment products and a granular view at a security level so that they can monitor portfolios and make recommendations/adjustments on an ongoing basis, said Fusco.
"Analytics is not an easy thing to compute and automate, and this is why Wilshire Omnia is providing a very interesting tool for clients that want to adjust investment portfolios or want to change to a different product type at a reduced cost," he said.
The new platform is centrally-hosted and delivered through a standard web browser, and can be accessed on a PC or any web-enabled mobile devices.
"The launch of Omnia is in line with the firm's approach to innovation around quantitative investment concepts and the use of our technology platform," said Loo. "The end-product is an extremely comprehensive platform which is backed up by an impressive data-set. We believe that data is the driver of this kind of development, and Wilshire has a very strong data foundation which is now being combined with our calculation engine and an interactive web interface."
That warehouse data set up has allowed Wilshere to inform the index process and build its index solutions capabilities. According to Loo, Wilshere is also keen in leveraging and investing in its index capabilities "because it is a regulatory concern for the financial services industry and we have the capabilities to provide an independent calculation service which will address issues around conflict of interest".
"A key activity within Wilshere's risk and analytics is our index business through which we provide calculation on the distribution of indexes to third parties," said Loo. "This is an area where we are seeing increasing demand and where we can leverage Wilshire's track record and experience in the index field."
The index space has taken off recently and we see significant demand from investment banks and product providers requesting a third party calculating agent for the indexes they have. "This has increased on the back of recent regulatory requirements which is forcing some firms to outsource some functions around indexing to address conflicts of interest and so on," she said.
In the structured products and derivatives markets there is more demand for index calculation services, according to Fusco. "We have been approached by firms developing indexes that are going to be used to underlie products and Wilshire Omnia can provide information about the performance of the index but also around specific asset classes, sectors and regions so that the end client can have a whole picture of where an investment portfolio is in relation to the performance and risk of the different products embedded in that portfolio," said Fusco.
Wilshire, which serves more than 500 clients worldwide with assets of more than US$8tr, has been around for more than 40 years providing investment advisory services globally including pension consulting, fund management, private equity, etc. The company was a pioneer in the quantitative analytics segment in the 70's with a number of developments around quantitative analytics and the use of mathematical models and computer technology. Wilshere has also been at the forefront of developments around multi-factor risk models that were developed to help investment managers and financial advisors to analyse their investment decisions.
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