Portfolio & Risk Analytics
The Bloomberg Professional service puts the industry’s most powerful suite of global, multi-asset portfolio and risk analysis tools at your fingertips.
Bloomberg’s Portfolio & Risk Analytics solution for investment professionals empowers you with the tools required to successfully implement optimal investment portfolio strategies. Our platform will help you make quicker, more informed decisions by enabling you to easily and accurately measure portfolio risk and return.
Fully integrated with the Bloomberg Professional service at no additional cost, our Portfolio & Risk Analytics platform gives you an end-to-end perspective for your portfolio—past, present, future—thus streamlining your overall investment management workflow.
UNDERSTAND HISTORICAL PERFORMANCE
With the Bloomberg Portfolio & Risk Analytics solution, you will be able to examine the historical performance of your portfolio, either on an absolute basis or relative to its benchmark. You will be able to identify the sectors or holdings that have exhibited the best risk/return trade-off and contributed the most to your portfolio’s return. You will also gain knowledge of and insight into which fundamental risk factors have driven historical performance.
A complete picture of your portfolio’s history is an invaluable tool. Bloomberg’s Portfolio & Risk Analytics solution enables you to:
- Examine the historical cumulative performance of your portfolio relative to its benchmark.
- Easily change the analysis time frame to home in on a specific sub-period or visualize long-term performance patterns.
- Gain insight into your portfolio’s historical risk/return trade-off by examining standard deviation, Sharpe ratio and other measures.
- Identify the sectors or holdings that have contributed the most to your portfolio’s performance and compare it with that of your benchmark.
Analysis and review of your portfolio’s historical structure gives insight into the how and why of its performance. The Performance & Risk Attribution platform from Bloomberg gives you the ability to:
- Analyze how the structure of your portfolio relative to its benchmark contributed to your active performance.
- Break down your active return in terms of sector allocation, security selection, and currency movements.
- For fixed income portfolios, further attribute your active performance to changes in interest rates and spread effect.
- Leverage our proprietary risk models to understand how various risk factors contributed to your portfolio’s performance.
ANALYZE CURRENT STRUCTURE
As you manage your investment portfolios, the Bloomberg Portfolio & Risk Analytics platform will help you leverage Bloomberg’s vast securities database to analyze your portfolio’s current structure and characteristics. It will display standard equity or fixed income fundamental metrics, such as P/E, yield, duration, and credit quality—and allow you to integrate your own custom data. You will be able to monitor your intraday performance in real time and quickly link to the news that is trending now that most impacts your portfolio.
Accessing, aggregating and analyzing specific data, including valuation ratios and current interest rate and other exposures, can be crucial to successful portfolio management. The Bloomberg Performance & Risk Attribution solution provides you with the ability to:
- Analyze the fundamental characteristics of your portfolio and how it compares with a benchmark as of a specific date or as a time series trend.
- View metrics such as valuation ratios, earnings growth, duration, credit quality, yield, and spread to evaluate the core investment structure of your portfolio.
- Understand your current interest rate exposures, credit risk exposures, and projected cash flow payments to help you make informed investment decisions.
- Aggregate by any classification, such as sector, country or any custom parameters that you define.
News that Affects your Portfolio
In this globalized world, being in-the-know is vital to success. Use the Performance & Risk Attribution platform to:
- Access Bloomberg’s ever-expanding news content—fed by more than 60,000 sources, including global press releases, broker research and blogs.
- Use news heat indicators to identify at a glance and then instantly view the stories that are most impacting your portfolio today.
- Create alerts for your portfolios based on unlimited keyword criteria, thus ensuring that every piece of news and research critical to you is captured in real time.
- Stay on top of how the markets are impacting your portfolio’s return throughout the day, allowing you to react quickly to events as they occur.
Intraday Performance Monitoring
Big picture, detailed picture—knowledge of both is necessary for optimal portfolio management. The Bloomberg Performance & Risk Attribution solution lets you:
- Track the intraday performance of your equity portfolio on an absolute basis or against a benchmark using real-time exchange prices.
- Monitor the intraday return of your fixed income portfolio by leveraging Bloomberg’s intraday fixed income pricing sources, including MSG1 pricing.
- Break down your portfolio by sector, geography or your own custom classification to isolate the drivers of performance today.
ANTICIPATE FUTURE RISK
Bloomberg’s proprietary fundamental risk factor models will help you measure, analyze and anticipate portfolio risk. You will have the ability to use multiple lenses and filters, including tracking error analysis and value-at-risk, to evaluate the risk in your portfolio. You’ll also be able to perform custom stress tests to gauge how your portfolio will respond to the next big market event.
Knowing and understanding risk factors and the securities that expose your portfolio to the most risk can offer you a significant edge. The Bloomberg Performance & Risk Analytics platform enables you to:
- Analyze your portfolio’s ex-ante (predicted) risk by using one of Bloomberg’s multi-factor risk models, which provide global and multi-asset class coverage across all of your positions.
- Understand your portfolio’s exposure to fundamental risk factors, such as growth, value, momentum, currency, yield and spread.
- Quickly identify the top individual securities which are contributing the most to your total active risk, and uncover the potential hidden risks that may be impacting your returns.
- Click through to the underlying fundamental data for full risk data transparency. (Bloomberg is the only industry provider of this service.)
The Performance & Risk Analytics platform offers robust approaches to measuring Value-at-Risk. Included are:
- The Value-at-Risk (VaR) calculation to estimate your portfolio’s maximum loss as measured at a given confidence interval.
- This popular, intuitive and easily interpreted measure of risk, the VaR helps you gauge the maximum extent of risk represented by the assets in your portfolio.
- The Bloomberg VaR utilizes the factor structure of our multi-factor risk models and supports industry-standard calculation algorithms, including historical simulation, parametric and Monte Carlo methods.
Be prepared for the next big market event by determining the probable outcome of various future scenarios. The Performance & Risk Analytics solution helps you to:
- Understand portfolio risk by utilizing scenario analysis, in which you can stress market variables to gauge the potential impact on your portfolio’s future performance.
- Perform stress tests on your portfolio based on various historical events, such as the debt ceiling crisis of 2011, as well as hypothetical market scenarios, such as a change in interest rates.
- Evaluate which scenarios would be best or worst for your portfolio and drill down into your portfolio holdings to see which sectors and securities would most be impacted.
Test Your Investment Ideas
Bloomberg’s Portfolio & Risk Analytics solution includes fully integrated portfolio construction tools that will help you to perform real-time analysis of the impact of hypothetical trades on your portfolio’s fundamental and risk characteristics. You will also be able to run multiple versions of hypothetical trades or backtest your investment strategies as you work to construct your optimal portfolio.
Trading decisions need to be based on the best data. The better your information, more likely the better your trades. Bloomberg Performance & Risk Analytics platform offers you the ability to:
- Quickly evaluate potential trades or edit existing positions by using the Trade Simulation functionality, which is fully integrated.
- Analyze in real time the impact of hypothetical trades on your portfolio’s performance, fundamental characteristics and risk structure.
The better the components, the better the likely outcome. The Performance & Risk Analytics solution enable you to:
- Use the Portfolio Optimizer to identify the best set of trades from your investable universe that will give your portfolio the characteristics and risk exposures desired.
- Apply real-world constraints such as portfolio turnover and transaction costs when generating trade ideas.
- Generate an efficient frontier of optimal portfolios based on a range of trade-offs between your optimization goals and constraints.
- Backtest your trade ideas to see how your investment strategy would have performed historically.