SunGard Asset Management has partnered with RiskMetrics to integrate its portfolio construction and analysis modules of its WealthBench platform into SunGard's AddVantage Web-based asset-management system. The integration will include access to the RiskGrades tool for analyzing client portfolios and assigning certain risk "grades" down to the individual security level.
While SunGard's other risk offerings lean more towards "enterprise risk management," says George Myers, group executive vice president at SunGard Asset Management, the RiskMetrics offering provides more of a portfolio-level view of risk. "This is a smaller set where we're focusing on client portfolios and understanding risk at the security level," he adds.
The WealthBench modules are targeted towards AddVantage users such as asset managers and investment advisors for determining, implementing and monitoring investment strategies. "What is unique about RiskMetrics and their RiskGrades is that they're able to assign a risk factor to the individual security level and then can show how the interplay between the securities at the portfolio level affects the overall RiskGrade for that portfolio," says Myers.
AddVantage users will also have access to RiskMetrics' portfolio-construction tools where they can make portfolio modifications according to risk appetite. "For example, users can swap out one security for another security that has better risk attributes and then that information flows back into AddVantage for trade execution," says Myers.
The WealthBench functionalities are offered to AddVantage users on an application service provider basis, with a real-time link from the platform to the RiskMetrics applications for the encrypted XML-based information. The RiskMetrics options will appear as menu items that users can click on and access. "For years our clients have provided their customers with performance measurement reports, i.e. how has the portfolio performed over the last three months, the last year, the last five years in terms of the rate of return," says Myers. "So they've done a good job in telling the return story and with RiskGrades the risk story and the risk and return go hand in hand."