Ryedale has added significant new functions in the latest release of its portfolio management software. Many of the new features are aimed at widening the appeal of the system to managers wishing to monitor risk in tailored views. For instance, ESG scores can now be integrated into portfolio views and used in the portfolio construction process. There is also much more support for ETF-specific processes, including tax optimization and improved tools for managing multiple variations of custom ETF baskets. These major enhancements are accompanied by a raft of smaller enhancements which make the 4.0 release the best Ryedale Platform yet.

Customizable Risk Monitoring

Many portfolio management systems are limited to pre-determined ways of analysing risk. A system aimed at international equity will model country and currency risk. A system for Liability Driven Investment will look in detail at cash flows and key rate durations. A corporate bond analysis will centre on credit ratings and credit spreads.

In version 4, Ryedale has added full flexibility in how these risk measures are attached to portfolio holdings and has developed a set of customizable risk views. This allows the Ryedale user to have a customized view of each portfolio which incorporates the relevant dimensions of risk. In other words, the international equity portfolio has views which monitor country, currency and industry risk whilst the corporate bond portfolio has views which monitor credit rating, credit spread and duration.

The data management in the Ryedale platform enables users to capture and integrate any data point relevant to the portfolio construction process. Such data points may originate with data/index vendors and be captured by Ryedale’s data consumers, or they may be the proprietary outputs of the customer's own research. Once these portfolio 'aspects' are set up, users can set up tolerances for the permitted active weight around any aggregate exposure and build a customized framework for managing risk in any portfolio. These tolerances then act as controls on the automated rebalancing tools in the Ryedale platform.

Ryedale Customizable Risk View

ETF Manufacturing Support

Ryedale builds on first-class support for indexing strategies to support all aspects of ETF manufacturing, from PCF creation to tax-efficient trading. We are seeing an increasing desire amongst managers of ETF portfolio to take closer control of the PCF creation process for the following reasons:

• 'Standard' PCFs, created by a custodian without knowledge of the manager's particular circumstances and following inflexible rules, cannot respond to operational necessities, such as the substitution of one security for another or the projection of an unexpected index announcement. 
• In some tax regimes, it is important to avoid distributing capital gains wherever possible. Customizing ETF in-kind baskets using tax-lot information offers a way of doing this. Using custom in-kind baskets necessitates publishing customised PCFs to private channels.
• The various frameworks for active ETFs often entail creating PCFs which approximate the portfolio’s actual holdings in an approved way. Here it is important to control the PCF creation process to remain compliant with regulation whilst not revealing everything about what is in the portfolio.

Ryedale’s industry-leading support for ETF manufacturing has been upgraded in version 4 with these needs in mind. The platform offers the most comprehensive toolset for ETF managers who wish to control every aspect of the investment process.

"As an early adopter of Release 4.0, I'm very pleased with the latest enhancements the Ryedale team has developed. We have been using the Ryedale Portfolio Management Platform since 2017, and it has been a massive driver of efficiency for us. As an ETF provider, it is essential that the system we use supports all aspects of ETF manufacturing. The system enhancements in Release 4.0 really does move the Ryedale offering into a league of its own when it comes to Index Portfolio Management."- Martin Bednall, Managing Director at FinEx Capital Management LLP.

Time Series Everything

A less obvious but far-reaching change in Ryedale Platform 4.0 is the storage of complete historical time series of practically every data point. Although the portfolio construction process is most concerned with data as of a recent time point, the platform organises data into series and adds new data to these incrementally as new data arrives whilst keeping history.

The result is that the data platform supports both current-day portfolio management and historical analysis. The open architecture permits API-based access to time series data via end-user programming, such as Excel, Python, R, MATLAB. By integrating portfolio management with research data, the Ryedale platform eliminates the extra expense of separate data silos within the same firm.

There is enhanced history and data visualisation within the Ryedale front-end software. For example, the screens of the security master now incorporate graphing tools for security analytics. The time series dimension of returns and holdings open up the path to performance attribution. Ryedale has a suite of performance reporting tools to fit the needs of indexed and asset allocation strategies under development for an upcoming release.

Ryedale Performance Reporting

Other Enhancements in 4.0

There are many other improvements in 4.0, including:

• Improved tools for FX order creation (both spot and forward) and FX order management tools.
• Cash management with support for projecting to specific trade dates and dealing with accruals and other non-spendable value.
• Support for fixed income benchmarks which hold cash pending re-investment.
• Enhanced reconciliation tools permitting full comparison between IBOR and administrator NAV, suitable for supporting the NAV sign-off process.
• An enhanced event viewer, with advanced diagnostics for data import operations.