1. Does Behavioral Risk Index impact portfolio decision?
No, it does not impact the client's asset allocation. Portfolio decision are primarily driven by client's risk tolerance and time horizon.
2. Do you track changes to risk tolerance results and risk appetite questionnaire, specifically identifying who made the changes?
If you go to AccuProfile, click the History you will see the user who made the last changes.
3. Is it possible to choose a specific security extension for other securities, aside from the default security extension you have?
We can configure a custom security extension, where a given security is extended by another security. Email support@andesrisk.io for requests. Click here for more information.
4. Do you use the holding positions from the inception date for running the analytics?
For running the analytics, we use the holding positions from the inception date.
5. Do you have rolling risk and rolling returns charts?
On the model page, we show rolling risk and rolling returns on the risk monitor tab.
6. Do you customize the IPS?
We offer IPS customization using our back-end toll, but we don't encourage extensive customization. Please note, there is a fee for any changes made.
7. In the performance attribution, does the securities reflect the periods when they were held or when it was first acquired?
The performance attribution is a security level attribute. The security will reflect even if you are not holding it for instance 3-years. However, there's a limitation, say you have Tactical models, it will look at the security in the most recent snapshot or what your current holding is.
8. Can I choose my own target asset allocation instead of your canned models?
Yes, you can set your own model portfolios in the target asset allocation.
9. Is it possible to generate the IPS without taking the risk tolerance test?
To finalize the IPS, ensure that both the Investment Time Horizon and Target Asset Allocation are specified.
10. Do you convert Nitrogen Risk Number to Andes Risk Platform?
To convert the Nitrogen Risk Number to the Andes Risk Platform, we divide the Risk Score by 5 to determine the volatility of the model portfolio.
Click here for more information.
11. Does the account or portfolio keep track of any subsequent changes?
The account or portfolio updates to reflect the latest position in your account. Additionally, it stores the history of the positions, which can be accessed if you click "Export to CSV" to view and track the changes.
12. What is the impact of the capital market assumption on my model?
The Target Return and Target Volatility also known as Capital Market Assumption represent the projected return and volatility of your model for the next 3-5 yrs. It plays a crucial role in determining the risk band in the risk tolerance test, which is influenced by the target volatility you have set.
Please click here for more information about Risk Bands.
13. Why my portfolios doesn't have analytics?
You can manually calculate the analytics by clicking on "Calculate Deep Analytics" on the Portfolio page. A portfolio may not have analytics for the following reasons: 1. It is a small account. Our proprietary analytics is calculation intensive hence it is not automatically performed on small accounts. The threshold for small account is $50,000, and it is subject to change. 2. The advisor (or someone else) has marked the portfolio as "do not monitor"
14. When do we use Portfolio Health Check?
1. Using Portfolio Health Check to Convert Prospects
2. Monitoring Portfolio Performance
3. Monitoring Financial Crisis
15. Do I need to run analytics every time I add or remove a security in a portfolio?
Yes, you need to run the analytics again to pull the valid data.
16. Do you pre-populate Capital Market Assumption?
No, we do not pre-populate the capital market assumption without it the RTT won't work. However, if requested, we can enter the capital market assumptions on behalf of the client.
17. What is the formula for 80% confidence upside/downside?
We assume that returns follow the normal distribution, which is defined by the mean (target return) and standard deviation (target volatility). We use 80% confidence interval, which is 1.28 standard deviation:
Upside = Target_return + 1.28 * target_volatility
Downside = Target_return - 1.28 * target_volatility
Note this formula applies when the time period is set to 1-year. If it is set to 6-month, the values will be adjusted accordingly.
18. What does the Behavioral Impact do to the account?
Timing the market—trying to get in or out to beat the market. For example, during the downturn in the year 2000, when the market was declining, some investors tried to exit. This is why the yellow line began to level off, as they sought protection while the market was falling. However, those who exited often ended up getting back in too late.
19. Is the behavioral impact determined by the questionnaire or this is more general?
It is based on the questionnaire, we provide you with a Behavioral Risk Index. For example, if your Behavioral Risk Index is 5, which is relatively on the lower side and indicates a more moderate risk, you would have a medium behavioral risk level.
20. Where does the Cap Mkt Assumptions come from?