Marco Della Torre, CEO of Venn by Two Sigma, joined Keith Black, Managing Director of RIA Channel, at the CAIS Summit to discuss how a portfolio analytics platform can help build client relationships.
Venn is a quantitative analytics platform offered by Two Sigma, a preeminent quantitative hedge fund. The platform provides advisors the opportunity to perform quantitative portfolio analytics and to produce branded reports that can be shared with clients and prospects.
The CAIA Association published the Total Portfolio Approach, which uses factor analysis as its cornerstone. Factor analysis allows investors to see where the risks are, regardless of the name of the investment strategy. Investors should evaluate what risks are driving each investment, seeking to allocate to those with truly unique and diversifying exposures.
Advisors work with clients on both a relationship and a technical, financial basis. Advisors who can use a platform to inform the technical topics can have more productive conversations with their clients and prospects. Having a clear understanding of the risks driving the portfolios and how those risks might modify returns during a specific market scenario can add conviction to the portfolio construction process. This helps investors weather the inevitable storms and remain with the portfolio in pursuit of long-term outcomes.
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