Risk Management

Wilshire Consulting offers asset owners three distinct opportunities to gain a better understanding of the sources of risk in their investment portfolio.

Wilshire Compass’ Risk Summary Report

Incorporating the current strategic asset allocation and the existing portfolio of managers, Wilshire Compass will generate meaningful analysis measuring risk and correlations over a selected historical time period. Detailed charts and graphs will examine the risk of the strategic asset allocation, the contribution to risk by asset class and the actual observed risk due to each asset class. For further granularity, additional detail is provided on the actual or current asset allocation and the percent contribution to total risk from that actual asset allocation.

The risk analysis within Wilshire Compass also provides an attribution of estimated risk from four distinct sources:

  • Strategic Risk: The risk due to the strategic asset allocation. This is the risk inherent in the Plan’s policy and therefore could be thought of as policy risk.
  • Allocation Weight: The risk coming from the difference between the actual asset class weights and the strategic policy weights.
  • Benchmark Mismatch: The amount of risk coming from a manager (or collection of managers) tracking a different benchmark(s) than that which is used to measure the asset class as a whole.
  • Manager Risk: The amount of risk coming from the investment manager versus its benchmark. This could also be thought of as active management risk or idiosyncratic risk.

Wilshire Compass Acuity

Wilshire Compass Acuity couples analytical power with risk modeling know-how to deliver total fund risk analysis beyond the scope of an off-the-shelf product and yet still within the budget of most asset owners. Utilizing award-winning and proprietary technology, the Wilshire Compass and Wilshire TRMS teams collaborate to offer the institutional investment community an affordable, actionable and timely risk management reporting service.

Wilshire Total Risk Management Solution (TRMS)

Wilshire TRMS is a holistic approach to risk management for institutional investors. Developed, delivered and supported by Wilshire Consulting, Wilshire TRMS addresses all aspects of a proper risk initiative including: developing a customized risk policy, developing a comprehensive risk implementation plan, leveraging award-winning risk management systems and delivery of actionable risk reports coupled with meaningful interpretation and ongoing monitoring.