This fund of funds team was unable to determine if the funds on the buy list were significantly superior to similar sounding investments. They were also unable to sufficiently differentiate funds based on fund strategy – not just performance figures. Using the standard 3 x 3 style box analysis limited their ability to perform deeper analysis during the fund selection process, they needed to gain more granular understanding about a fund’s positioning and exposures to various styles to better inform their clients.
Additionally, the operational burden of uploading fund data on over 200 funds in different formats and frequencies was causing internal inefficiencies on reporting.
Working through the current flow of how a fund selection team operated, many of the issues of analysing and reporting on fund of funds could be solved by streamlining and automating the fund data collection and review process. By providing market, portfolio and peer analysis on one platform this enables the fund selection team to quickly construct fund of fund portfolios, test the performance scenarios and provide deep insight into the oversight process.
Our use case
We use Style Analytics in multiple ways to support our buy list and due diligence process. From initial fund research through to our due diligence and internal review process, we are now able to communicate and put into context how each fund on the buy list is performing through different types of style exposures. The deeper analysis gained can be further challenged by the portfolio managers with regards to risk and fund exposure. Style Analytics’ fund data management service has enabled us to streamline this process further by removing the many manual and often time consuming processes to deliver succinct reporting. The ability to drill down into individual factor performance and being able to attribute this to performance instils trust in our firm’s ability to offer exceptional funds on our platform. Head of Portfolio Management
With the help of Style Analytics’ tools and services, the fund of funds team have completely streamlined and minimised inefficiencies created in the uploading of fund data. This part of the workflow alone has saved 50% of costs associated in performing this necessary function. The team are now able to create fund of fund portfolios which include “what if” scenarios quickly and effectively. The analysis provided allows the team to validate the funds on the platform, particularly showcasing that the funds are not only superior but also add value to clients.