Taking performance reports beyond publicly listed securities

Late last year, YCharts enhanced its platform’s performance data visualization capabilities with the launch of its Dynamic Model Portfolios functionality. Simple but powerful, the feature allows users to not just model a portfolio’s historic risk and returns based on their current investment strategy, but also simulate how past changes in holdings impacted, or would have impacted the portfolio’s overall performance.

“We’ve had great feedback on our Dynamic Model Portfolio functionality,” said YCharts Chief Product Officer Caleb Eplett. “There’s been a lot of implementation and usage of those types of model portfolios, especially with the dynamic history to actually go back and look at performance more accurately.”

But even as YCharts was developing that functionality, Eplett said the platform was working on another parallel problem. Based on feedback from users and external inquiries, the company discovered a need among users to represent assets and securities in their portfolio that were not publicly available.

To address that gap, YCharts introduced another feature last month. With the new Custom Securities Functionality, users will be able to enrich their portfolio performance models with data on investments that aren’t reflected on typical financial data platforms.

“Now users can upload both returns data on non-listed securities, whether that’s current or historical, and represent how those non-listed securities can influence a portfolio’s overall performance,” Eplett said. “Alternatively, users can also upload the data on just one specific non-listed asset, and model its returns over time.”

According to Ariel Kutcher, account executive leading the Canadian team at YCharts, the Custom Securities Tool lends itself to a handful of widely encountered use cases in the Canadian context.

“First, I see proprietary funds being fairly prevalent across Canada,” Kutcher said. “A lot of people I’ve talked to at investment dealer firms and fund companies don't have or don’t want their strategies included in a public database. At the same time, they still want to be able to show the performance of those portfolios with or without those holdings, giving a concrete view of why people invest in those funds in the first place.”

Another use case, he said, would be for securities that fall outside public databases, which are used to enhance and diversify portfolios with non-correlated returns. That includes alternative asset classes like private debt or private equity, annuities, and even cash holdings.

“We already have some features in YCharts that let users track the performance of Bitcoin, whether it's in the actual Bitcoin price reflected in our system or investment vehicles that provide exposure to the returns of altcoins,” Eplett said. “But if you have data on the performance of someone’s actual investment in cryptocurrencies, that can also be uploaded as a custom security to better its impact on their portfolio.”

According to Kutcher, the new tool has attracted interest from a variety of stakeholders, including independent advisors as well as those affiliated with banks and other large institutions. Many new users have just signed on to the YCharts platform, he said, because it solves a constant struggle they’ve had to reflect proprietary and non-public investments in their portfolio reports and general communications. The launch of the tool had also been greatly anticipated by many pre-existing users, Eplett added, who said they’d be able to use it right away as soon as it’s available.

“I'd say between the independent dealers, the asset managers, and just institutions in general, I think there's something in custom securities for everyone,” Kutcher said. “It really fills a hole that they've seen time and time again from the various investment platforms that they've used historically.”