Source: Credence Analytics
Credence Analytics recently launched FundMetrics, a risk management system for mutual funds that would be a one stop solution for tracking, analysing and reporting of all internal risk return numbers. For the mutual funds in India FundMetrics has been configured to generate all the risk numbers specified by the regulator, SEBI.
The mutual fund industry has been witnessing a lot of changes and upheaval in the recent years and this has in turn made 'risk management' a critical focus area for the fund houses as well as the regulators. Fund houses have become increasingly risk conscious especially in the context of the expanding investor base, increasing assets under management and volatile market conditions. SEBI has formalised this and made risk reporting mandatory for mutual funds. SEBI recently sent out a circular on risk management to all the mutual funds. This created a clear need for a centralised integrated risk management system for managing, monitoring and reporting the various areas and types of risks.
Risk management had always been a critical area for mutual funds and to strengthen this risk function there was a need for a specialised software solution. Credence Analytics had extensive experience in providing risk management solutions to the banking and financial services segment. Using their technical and functional expertise, they developed FundMetrics, the first comprehensive risk management solution designed for mutual funds to meet the internal and regulatory reporting requirements and to incorporate recommended best practices within the fund house.
Two leading fund houses in India have already implemented FundMetrics. A leading foreign fund house also has recently chosen FundMetrics where it is now being implemented. This solution not only calculates all the relevant risk return numbers for the funds but also assists in flexible querying and reporting of the same. The system is integrated with the in-house investment management and fund accounting systems to retrieve portfolio information. FundMetrics is also designed to track all the internal and regulatory limits and exposures and report the utilisation status for these limits.
FundMetrics is designed for use by both the risk managers and the fund mangers. The risk manger can track all the risk numbers and all the SEBI and internal limits while the fund managers can view and track the same for trading support and fund management decisions.
While describing the newly launched product, Credence Analytics' CEO, Mr. Vijay Simha said that "FundMetrics would evolve to be a complete risk-management suite for the fund industry which would keep evolving according to the requirements of the industry and the expectations of the regulators."