Index Fund Management

A sophisticated, user-friendly and effective solution, offering indispensable assistance to an inexperienced index fund manager Riskk.Com Index Tracker is a fully menu driven system for total management of an Index Tracking fund.

The optimizer minimizes the tracking error while maintaining the weight constraints of each stock including cash, and a beta of 1.000. Our simulation produced optimized portfolios that required minimal re-balancing. The cash weight of about 2-4% in the portfolio helps to:

  • Simplify the rebalancing options
  • Minimizes the rebalancing transactions
  • Stabilizes the portfolio beta and tracking error

The important daily task of rebalancing is simplify:

  • The system automate the pre and post balancing process including generating the optimized weights, rolling forward the stocks position and storing the key statistics
  • Rebalancing is interactive. The user can key in trial transactions, the portfolio tracking error and beta are displayed immediately.
  • Simple rebalancing options where their precise impact on the beta are displayed

The system manages the performance measurement. It calculates and displays the cumulative capital, income, costs, transaction volume, portfolio return, index return, beta and tracking error. These statistics are stored after each re balancing for the purpose of ex-post analysis.

The ability to simulate is indispensable to a new tracker fund. Simulation helps to resolve the many issues in setting up the fund and gives the manager practice and confidence in rebalancing the fund. It is the only tool for the skilled operator to research into improved rebalancing strategy. Riskk.Com simulations function is unique and is facilitated by the following:

  • 10 year historical price data is totally integrated with the system
  • The historical CI index value is recalculated to reflect the changes in the index basket. The use of the actual CI index values will generate incorrect simulation results
  • Store key rebalancing statistics for analysis (includes transaction costs)
  • Automated pre and post balancing processes simplify multiple rebalancing

Technical Support and Services:

Riskk.Com is prepared to offer unlimited support, training and service in the first three month of licensing to ensure a successful launch of your first tracking fund. We will charge a token one month license fee for this service. It is important to start the fund off correctly to avoid costly rebalancing and unacceptable tracking errors.
The price database is updated as part of the daily operation.
Once the fund is running smoothly, the operation is expected to require minimal servicing.