Performance and Risk Reporting Services

The South African investment landscape has changed since the introduction of the Reforms by the National Treasury. As a result there are now more fiduciary responsibilities on the part of Trustees to ensure that, among other things, investment managers meet investors’ expectations. To this end, Trustees have to ensure that they monitor their investment managers more rigorously. This can only be achieved if they have access to world class and easy to understand performance and risk and attribution reports.

In addition, Trustees’ due diligence on investment managers now demands more rigorous processes, and the performance and risk reviews must be more frequent, stringent and timely.

Performance and Risk Monitoring 

We have a dedicated focus on analytical innovation and a disciplined quantitative approach in everything we analyse, investigate and attribute. Our motto is “always count”.

The new generation of investors demand more meaning and understanding in the numbers. We believe that our quantitative analysis, a new way of thinking and fresh reporting ideas enable investors to see the true meaning in the performance and risk numbers. Our performance and risk reporting helps investors to understand what they are investing in and to furthermore help them to make high conviction as well as informed decisions.

We provide full and fair disclosure of any investment results to investors, guaranteeing that all investment managers or products (and even their selected stockbrokers) are assessed on a level and objective playing field.

Our quantitative analysis and reporting tools empower our clients to:

  • Audit the success of their existing long-term investment policy which includes the strategy, investment structure and the profile implemented;
  • Revise or define the investment and risk guidelines of the investment mandates;
  • Analyse detailed quantitative due diligence reports to screen and to select suitable investment managers or products;
  • Objectively define an investment fee structure that aligns the investor and investment managers’ interest;
  • Optimally blend investment manager mandates or products via our quantitative optimisation techniques;
  • Perform detailed holdings based attribution analysis to assess the investment skill and success of the investment managers;
  • Implement a dynamic risk management and monitoring framework to increase risk transparency.

We have recently introduced Total Cost Reports, Transaction Cost Analyses Reports and Securities Lending Income Reports to the range of performance and risk reports which we already offer to our clients. All these new reports relate to costs paid or income received which require detailed analysis and various compliance and good governance checks.

For example, Trustees have a fiduciary duty to minimise transaction costs and other expenses that are not justified by the objectives of the investment strategy. Transaction Cost Analysis (TCA) is the measurement of the costs to trade.

It is increasingly recognised that the effective attribution of trading costs is an integral part of overall investment monitoring. In periods when investment returns provide low results in absolute terms, trading costs are even more important as it makes up a more significant portion of the returns. Investment managers are responsible for transactions just as they are responsible for investment decisions. Trustees and investors should therefore be cognisant of transaction costs which are often equal to or greater than investment management fees.

Securities lending adds liquidity and efficiency to the securities markets and supports trading activities and strategies in all major markets. Borrowers (such as stockbrokers or hedge fund managers) can borrow securities from lenders (such as pension funds) in order to cover short sale trades, hedge risks and conduct arbitrage in the market. The borrower will pay a fee to the lender which provides the lender with low risk yield enhancement to their portfolio. Our Securities Lending Reports empower investors to understand the income generated from such activities and the risks taken to generate such income.

In addition to the detailed quantitative analyses of costs and income, both our Total Cost Reports, TCA and Securities Lending reports include a compliance checklist to quickly flag any regulatory and compliance risks. More than just being reports for information, they include recommended action item lists that should be followed in order to resolve any issues flagged with the compliance checklist.

Our performance and risk reports are tailor-made to each client’s requirements. We therefore structure a performance and risk reporting framework that fits our client’s specific needs rather than to provide a standard report. We pro-actively produce on-going new complimentary reports as our approach evolves as we always strive to provide the best performance and risk reports in the retirement fund industry.

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