Integration with portfolio analytics platform provides greater visibility into portfolio-level and security-level liquidity risk
BondEdge Solutions, an Interactive Data company and a leading provider of portfolio management and risk analytics solutions, announced today that Interactive Data's Liquidity Indicators are available on its portfolio analytics platform. The liquidity data allow portfolio and risk managers to obtain greater insight into bond liquidity with the powerful BondEdge reporting and custom analytic features.
Concern over liquidity in the fixed income markets continues to be expressed by some market participants and regulators in an environment in which the expectation of rising rates and a possible flight from certain fixed income assets could adversely impact price and liquidity and challenge a manager's ability to dispose of holdings in a timely manner at an anticipated price. The recent Security and Exchange Commission’s (SEC) proposal regarding liquidity risk management programs for mutual funds has added to the focus on how firms are actively assessing and managing their ability to liquidate certain assets within an expected time frame and at an expected price.
With the addition of Interactive Data's liquidity indicators, BondEdge clients now have a powerful new tool to deploy as they seek to make even more informed investment decisions and be better positioned to address future regulations which may impose additional obligations on them. The BondEdge tools can be applied in the analysis of a security’s relative projected liquidity compared to other securities in a portfolio by issuer, sector, or against bonds with similar risk characteristics such as yield or duration. In addition, custom analytics can be performed, incorporating measures such as Projected Trade Volume Capacity, which allows a portfolio manager to estimate the potential number of days that may be required to liquidate a position given specific scenario assumptions.
"The management of liquidity risk continues to be a top priority for fixed income managers, many of whom need to service redemptions on a daily basis," said Geoff Fite, President, Interactive Data’s BondEdge Solutions. "Now, by incorporating Liquidity Indicators into its service, BondEdge can help its clients gain an enhanced understanding of this critical risk element and build further confidence in their ability to develop effective processes to help manage that risk," he added.