Sell-side firms increasingly turn to Axioma’s innovative equity and multi-asset class products to streamline their portfolio-construction, risk-management and trading operations--ultimately driving increased equity, fixed-income, and currency-trading revenue.
Axioma Risk, our multi‐asset enterprise risk system, allows banks to consolidate their risk-management platforms, achieving superior insights into cross-asset exposures and risk across the entire organization.
And with regulatory demands continuing to ratchet up, sell-side firms rely on Axioma for stress testing, scenario analysis, and macro‐economic risk analysis.
Axioma’s sell-side clients include:
- Portfolio Trading
- Delta One/Synthetic Equity
- Sell-Side Equity Research
- Prime Brokerage
- Clearing and Custody
When trading desks pool trades from separately managed accounts for execution, the realized market-impact cost can be far greater than the sum of the predicted cost over all accounts. Axioma’s multi-portfolio optimization technique rebalances multiple portfolios at the same time, considering joint effects while adhering to account-specific constraints.
The practical issues that arise due to the interaction between three principal players in any quantitative strategy, namely, the alpha model, the risk model and the constraints are collectively referred to as Factor Alignment Problems (FAP). Axioma researchers provide theoretical guidance to clarify the role of constraints in influencing FAP and illustrate how Axioma’s Alpha Alignment Factor (AAF) methodology can handle misalignment resulting from constraints.
With virtually limitless objectives and an equally unlimited range of constraints, Axioma Portfolio Optimizer delivers maximum flexibility to model even the most complex strategies for a wide range of investment management approaches, from quantitative to fundamental.
For sell-side firms, Axioma Risk is a "unified" multi-asset class risk management platform for middle-to-front office users, providing risk reporting, risk analysis and decision support for multi-asset class portfolios.
Axioma Portfolio Analytics provides time-series risk analysis, stress testing, and both traditional Brinson and factor-based performance attribution, fully integrated with Axioma's fundamental, statistical and macroeconomic risk models as well as custom risk models built with the Axioma Risk Model Machine (RMM).
Low volatility-themed strategies have been among the most popular "smart beta" index products introduced in recent years, and minimum variance in particular has become a widely adopted approach to implementing low-volatility exposure. Axioma researchers consider to what extent the "theoretical" low risk of these strategies is driven by illiquidity masquerading as low volatility. Do returns of minimum variance strategies encapsulate some form of liquidity premium in addition to the outperformance of low risk stocks? And, if there is a tendency to tilt towards smaller and less liquid stocks, what can be done to ensure tradability of minimum variance portfolios?