Portfolio rebalancing

Portfolio Service Investment Agent" module or "Portfolio Service Rebalancing" module

In addition to the detailed analysis of portfolios and professional client reporting, the regular adjustment of client portfolios to the agreed specifications is one of the core tasks of financial portfolio management. The Infront Portfolio Manager provides you with equally comprehensive support for the target/actual comparison of strictly standardized asset management as well as for a more individual approach that requires more intervention options as part of the rebalancing process.

To support the standardization of investment processes, the Infront Portfolio Manager offers a very flexible portfolio reconciliation. You compile weighted securities lists in so-called modules. The modules themselves can be combined with each other in a weighted allocation rule, in which any customer master data can also be taken into account. The investment agent defined in this way is assigned to the portfolios. Depending on the respective customer profile, the central specifications are regularly broken down to all customer portfolios in a portfolio rebalancing process. The resulting scheduling proposals can be reworked if necessary, e.g. to accommodate special cases or resolve conflicts with individual restrictions. After confirmation, the reallocation proposals are transferred to the order book, from where they are transmitted to the core banking system or the respective custodian bank (order placement) after any further checks and additions. Where electronic order transmission is not possible, the fax or CSV order export can help.

The functionalities around the portfolio rebalancing tool and order book were used up to version 5.00 of the Infront Portfolio Manager to handle portfolio rebalancing based on target portfolios across larger groups of portfolios. The target portfolio was defined by a portfolio-dependent weighted combination of securities modules. The "Portfolio reconciliation" functionalities were used to carry out a reconciliation with target portfolios, which are given via booked model portfolios, or to implement rebalancing of individual securities.

The two tools have been integrated so that a standardized interface is now available for group-based regrouping. In addition, the interface has been expanded so that its functionalities for order simulation and pre-trade checks can also be used for the direct manual entry of orders on individual portfolios.

The regrouping form has various operating modes:

• Ordertool
  No orders are generated here, instead orders are entered manually. These are stored in the order book or forwarded directly to the order interfaces.

• Standardized rebalancing
  Here, an order is generated using an investment agent or model portfolio stored in the portfolio.

• Ad hoc reallocation
  Order generation based on partial reallocation specifications that can be defined in the form.

• Currency rebalancing
  FX spot orders - Currency rebalancing in portfolio rebalancing

The handling of common aspects such as standard portfolio allocation, pre-trade checks, simulation of the resulting portfolio, selection of portfolios or order forwarding are identical.

The portfolio rebalancing integrated into the Infront Portfolio Manager therefore serves to support investment processes. The following section first defines what investment processes are. You will then learn in detail how your Infront Portfolio Manager implements these in practice.

This is preceded by a brief explanation of the modules requiring a license that play a role in the use of the portfolio rebalancing tool.