Portfolio Management Software

What is Portfolio Management Software?

Portfolio Management Software helps individual investors, traders, and large financial services institutions make better decisions in the financial markets and in structuring their portfolios.

Portfolio management tools vary in their scope and application.

Some focus ways of analyzing the financial markets whether that be technical consideration (e.g., chart patterns, previous price history) while some focus on fundamental analysis (i.e., value based on intrinsic characteristics of a business or market).

Some portfolio management software focuses on only equities, the most popular market. Others specialize in currencies (i.e., FX), commodities, bonds and fixed income, more specialized markets (e.g., CDS, derivatives), or can be more general in nature.

Others don’t analyze the financial markets directly and instead focus on risk management and portfolio construction.

These tools stress test portfolios through scenario simulations, working to identify various types of risk (e.g., idiosyncratic, systematic) across multiple asset classes, measure the potential amount of risk, and generate plans and strategies of how to mitigate it, such as identifying hedging opportunities or better ways to balance assets in a portfolio.

Portfolio management tools help generate reports, and aid investors in evaluating potential deals and investment opportunities and how they might fit into a portfolio.

Running a portfolio through different scenarios, such as the stock market declining by a certain percentage, can be analyzed and reported on. This can help individuals and institutions find quality investment opportunities and hedging arrangements using the financial instruments available to them.

Other financial services software may integrate with investing and portfolio management software and connect with other sources of data.


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