Vestek Systems has released software for managing portfolio liquidity risk.
Liquidity Alert now is being offered to the firm's 350 clients on a trial basis, helping money managers and plan sponsors red-flag risky equity positions that could prove costly at a moment's notice.
The software analyzes a portfolio by charting the forecast transactions cost, recent momentum, percentage of recent volume, capitalization and number of shares that are owned. Plexus Group, Santa Monica, Calif., supplies to Vestek ex ante transaction cost data. Plexus also estimates the cost of liquidating a stock.
Clients transmit portfolio data online to Vestek or Vestek works directly with the custodian. The firm can do aggregate cost liquidity as well as looking at specific stocks.
Results can be reported in three ways: Alert, Watch List and Scenario Analysis. Alert provides a daily or weekly review of an aggregate portfolio to see which holdings might fall victim to bad news. Watch List gives a daily review of a subset of holdings, a list of stocks or a list of active orders. Scenario Analysis is a periodic review of a portfolio or stock list that uses price momentum to show areas likely to be hit by sudden market changes.