Source: Standard & Poor's
Standard & Poor's, the leading provider of financial market intelligence, announced today the launch of Standard & Poor's Backtester, a new flexible and easy-to-use desktop application that enables asset managers to test simulated investment strategies back in time.
Using historical data from Compustat, Standard & Poor's Backtester helps active money managers, who are increasingly using quantitative methods, to quickly and easily develop real-world portfolio simulations to validate the effectiveness of their investment ideas.
Backtesting is the process of simulating a historical quantitative investment strategy to analyze the portfolio outcome. Standard & Poor's Backtester combines the rich data from Compustat with the strength of Standard & Poor's Research Insight analytics engine into a powerful quantitative tool ideally suited for money managers (particularly portfolio and hedge fund managers) or as an add-on solution for larger firms. Backtester allows investment professionals to define their own rules to buy, sell or hold securities and control the portfolio construction and rebalancing process in a simulation environment. Backtester runs locally on a PC, with Compustat data that is updated nightly and without heavy computer programming, so it is fast, flexible, and capable of quick parameter changes.
"Active portfolio managers and financial analysts who want to outperform the market need to easily and accurately test investment ideas over time," said JP Tremblay, Senior Director of Product Development for Compustat at Standard & Poor's. "Backtester's ease-of-use, speed, and real-world data, provide the right combination for the demands of quantitative investment professionals."
Standard & Poor's Backtester takes investment ideas and strategies, creates a full-fledged portfolio strategy around them, and simulates them in an environment that quickly and reliably takes into account the factors and limitations of the real world. Backtester allows the user to select and create combinations of variables, such as Transaction Costs, Taxes, Initial Investment, Holding Period, Weighting, Ranking and Scoring, Buy and Sell Rules, Cash Holdings, Purchases and Volume, Dividend Treatment and Rebalancing, and then test the scenarios.