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MSCI launches GenAI-powered tool and modelling technology

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MSCI has launched MSCI AI Portfolio Insights, writing that it combines generative artificial intelligence “GenAI” with MSCI’s analytics tools and modelling technologies.

“MSCI AI Portfolio Insights is designed to help investors better identify and manage potential emerging risks that dynamic markets pose to their portfolios,” the firm says.

MSCI writes that it has combined its extensive risk and performance modelling capabilities with GenAI to enhance risk reporting.  MSCI AI Portfolio Insights aims to create efficiencies and deliver insights to institutional risk and portfolio managers by helping identify and analyse the most salient information in risk reports before the working day starts.

Investors can use MSCI AI Portfolio Insights’ interactive capabilities to drill further into changes in their portfolios without any need for code or extensive user interface dropdowns. MSCI AI Portfolio Insights merges generated text with modern dashboards and cloud-based technology to enhance communication and efficiency in risk and portfolio management. These tools aim to empower risk management teams at asset managers, hedge funds and asset owners to drive collaboration across their firm’s investment teams.

Traditionally, risk managers have invested significant time and resources integrating complex models to process, clean, generate, store, and extract all data necessary to provide a comprehensive overview of risk and performance. Today, risk leaders at investment firms face increased pressure to deliver both enterprise-wide risk monitoring on a growing number of portfolios and risk advisory services to their investment teams. At the same time, global challenges like climate change, geopolitical tensions, macroeconomic uncertainty, and technological advancements have created new investment challenges and opportunities for risk leaders to monitor.

MSCI AI Portfolio Insights leverages proprietary algorithms to curate large volumes of data, aiming to surface the most important factors impacting risk and performance and connecting them as appropriate to market events. It also features an AI agent to help risk managers further understand and decompose the risk and performance drivers. Based on natural language interaction, the assistant can answer complex questions about portfolios.

“Institutional investors both can and must shift their risk teams from being largely control-oriented to also being an investment-focused function,” says Ashley Lester, Chief Research Officer at MSCI. “With MSCI AI Portfolio Insights, we are transforming risk reporting to make it more insightful and more accessible to investment decision makers.  Risk should not be just about monitoring: it should be about providing investors with actionable insights.”

MSCI also introduced the Macro Finance Analyzer, leveraging MSCI’s financial modelling and stress-testing capabilities. This tool is designed to test how changes to macroeconomic conditions could affect a portfolio’s risks and returns across asset classes, supporting investors’ asset allocation decisions. Users can explore and test a wide variety of conditions, with the ability to adjust expectations for rapidly evolving market events and trends – like potential impacts of interest rate changes or changes in long-term economic growth.

“At MSCI, we have observed a shift in the relationship between investment and risk management teams, driven by senior investment leaders’ growing demand for the integration of risk analytics into the investment process,” says Jorge Mina, Head of Analytics at MSCI. “Risk teams must seek efficiencies, modernise processes, and enhance the guidance they offer to the entire investment organisation. To accomplish these goals and increase collaboration with portfolio managers, risk managers need the right toolkit, which is now provided on a single platform by MSCI.”

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