An effective Portfolio Management System (PMS) is a tool which allows asset managers to action and monitor portfolios and align them to a desired strategy, market event, and many other parameters.? An effective PMS is often where a portfolio manager’s day begins and allows them to stage, model, and execute orders through a single software that integrates seamlessly with the rest of their investment operations workflow such as accounting, performance, reconciliation, compliance, etc.

What kind of PMS do I need?

PMS solutions often come with specific specializations.? Some are stronger at rebalancing (taking a current portfolio and allocating to new asset classes based on indices, models, and other portfolios), while others are more geared toward optimization (setting a particular objective and evaluating actions and trades to meet it).

A PMS can be utilized by either an asset manager or asset owner.? Asset managers will use it to combine their pre- and post- trade processes by bringing in the prior days transactions and positions and using the PMS to evaluate market opportunities and inflect selections and biases across portfolios.? Asset owners can use it to evaluate the effectiveness of their portfolios relative to economic and market events, positioning them better to monitor risk and analyze the effectiveness of managers.? Further segmentation can occur based on the type of manager, wealth vs institutional, and/or the primary asset class managed such as equities or fixed income.

What should I look for in a PMS?

As with any investment, the option selected must not only be what’s right for your organization today, but also should be scalable and meet its needs in the future. Many solutions in the market are expensive and built to do everything – quickly exceeding the budget smaller firms have.? Others are solely focused on optimizing or rebalancing, potentially restricting a further use case depending on the type of client and their needs.

At a minimum, your PMS should have:

• The ability to edit, update, and maintain your security master at the firm-level.? While most PMS will have a default security master, the importance of your ability to customize and create securities on-the-fly is critical to getting “apples-to-apples” measures and comparisons.
• Support for your entire current dataset, with ability to add others as needed.? This ability then allows you to add new asset types and models, or alternately, create new measures for optimizations.
• A high degree of interoperability between accounting and order management systems.? An effective PMS will bridge yesterday’s data with today’s, ensuring you spend more time actioning transactions and less time analyzing data issues, which Clearwater considers imperative.
• Exactly the features you need.? Margin compression is real and adding a new solution is not a consideration to be taken lightly.? Ensuring a solution that can deliver exactly what you need at a competitive price point is important.? Look for solutions that are “natively modular”, which will allow you to gain the efficiencies above, but without price tag that multiplies your budget.

Need more information – Discover all the components to a complete and healthy investment lifecycle here.

Why Clearwater PMS?

Clearwater’s PMS provides a modular solution for asset management teams and institutional investors, allowing them to rebalance, test, and analyze portfolios with a seamless transmission to manage orders for execution via FIX or direct connections. With daily valuations, custom security master, and support for all asset classes, Clearwater’s PMS is right-sized for firms looking to harness the power of a PMS, but specific to their needs.

Clearwater’s PMS supports the entire investment lifecycle by allowing you to:

• Manage multiple client portfolios through an easy-to-use dashboard
• Transmit and manage orders for investments of any asset class with validated, and timely data
• Apply real-time decision support based on portfolio goals and industry benchmarks
• Optimize position keeping and improve order workflows with blotter management integrated allocation methodologies, block orders, rebalancing, compliance enforcement, and order import

Learn more about how Clearwater’s Portfolio Management System can help you here and speak to one of our data warehousing experts by clicking here.