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Using a specialist to manage your portfolio holdings data

To make accurate and meaningful product-level ESG disclosures – whether in line with the Sustainable Finance Disclosure Regulation (SFDR) in Europe or the yet-to-be-finalised Sustainability Disclosure Requirements (SDR) in the UK – it will be necessary to aggregate the ESG disclosures or ESG ratings of all of the holdings in the portfolio.

For a bond fund or a money market fund to achieve a credit rating based on the ratings of its underlying instruments, a credit rating agency needs to know the details of all the instruments in the portfolio.

A number of fund platforms offer investors a portfolio x-ray facility, whereby the geographical and/or sector weightings of a portfolio of funds held by an investor are aggregated, for which they need to know the identity and weighting – and other attributes – of every instrument in every fund held by that investor.

These are just some of the possible reasons why fund groups wish to provide their full portfolio holdings to nominated third parties. But it’s not straightforward as it might first appear.

Here are three reasons why fund managers need access to specialist solutions to distribute full portfolio holdings data

Control: Highly sensitive and confidential data

The fund group may want to impose different embargo periods on the disclosure of some or all of its funds to some or all of these third parties, and they will rightly insist on confidentiality to ensure the information does not get into the hands of other investors, especially their competitors.

Efficiency: Meeting distributor requirements

All the third party recipients want the information on the fund holdings delivered in their own particular format because they slice and dice the data in different ways and for different reasons.

Support: Reducing administrative overheads

The maintenance of all of the above arrangements becomes very time consuming and could easily become a full-time job. Manual processes ensuring each distributor requirements are met, data validated and converted into different formats and then sent according to the different embargo periods are likely to cause errors downstream.

How FE fundinfo can help

FE fundinfo has been collecting and delivering full portfolio holdings data for our clients for the last ten years, but the new demands of sustainability disclosures have driven up the urgency for many groups to outsource the entire process to a specialist provider. Our expertise in data, distribution and disclosures ensure fund groups have the mechanisms in place to efficiently and securely distribute their holdings data. We have agreements with the most high-profile recipients of portfolio holdings data, so we know exactly what data they want and how they want to receive them. And we can set up new recipients to satisfy a client’s new requirement.

To make things as simple as possible, we can accept the data from fund groups in any reasonable format and we will convert that into the right format for the chosen recipients to accept them.

We can set up different embargo periods at a group, fund or recipient level, so groups can be confident that the right data are sent to the right recipients at the right time. And, of course, this is all done in accordance with confidentiality agreements so the information is not shared with parties who shouldn’t see it.

If you find the management of your portfolio holdings data to all of the different recipients is becoming too complex, or if you are concerned about the extra demands that will be placed on you by the sustainability disclosure requirements, speak to us to find out how we can help.

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