Investment management software provider Eze Software has teamed up with factor analytics specialist MSCI to enable investors to measure their exposure to risk in real time and adjust exposure as they trade throughout the day.
Eze is integrating MSCI’s factor exposure data into its order management system (OMS), with MSCI providing coefficients of the Barra Global Total Market Equity Model for Long-Term Investors and the Barra US Total Market Equity Model for Medium-Term Investors. These factor indexes and analytics models are designed to help investment managers understand portfolio movements and market risk, enabling them to build portfolios based on objectives and risk tolerance. Integration of MSCI factors with Eze’s software suite will enable managers to adjust style factor exposures based on real-time portfolio performance.
Eze says managers will be able to analyse their exposures pre-trade, diversify to prevent investments from crossing undesirable exposure thresholds, and adjust exposures as they trade. The solution will provide visibility into real-time exposure to given factors at the portfolio, strategy and security level, including access to intraday charts. It will help managers understand the ‘what-if’ impacts of a given trade on portfolio factor exposure, raise alerts when factor exposure breaches tolerance levels in pre-trade compliance checks, and target a specific factor exposure level in a single security.
Bill Neuman, Eze’s managing director of product and engineering, says: “We are seeing more clients using style factors as an analytical tool to optimise their portfolio strategies. By partnering with MSCI, we can ensure clients can act on that analysis in real time.”