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 (Total Risk Management Solution) teams collaborate to offer the institutional investment community an affordable, actionable and timely risk management reporting service.
Wilshire Compass Acuity assists asset owners seeking to gain a better understanding of the sources of risk in their investment portfolio. Incorporating the current strategic asset allocation and the existing portfolio of managers, Wilshire Compass Acuity delivers meaningful analysis measuring risk and correlations on an ex-ante (forward-looking) and ex-post (historical) basis. Detailed charts and graphs examine the risk of the strategic asset allocation, the contribution to risk by asset class and the actual observed risk within each asset class.
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.
Data Management is Shouldered by Wilshire
Wilshire Compass Acuity clients gain full access to the Wilshire Investment Database (over 36,000 investment vehicles) plus, Wilshire interfaces directly with the client’s custodian to obtain and maintain the necessary data and information to produce actionable risk reporting.
The risk reporting service of Wilshire Compass Acuity provides insightful analysis at the total fund, asset class and manager levels easily digested by investment staff, CIOs/Treasurers, investment committees and board members alike. Wilshire Compass Acuity answers the “right questions” as it pertains to risk.