Capabilities

Investment Risk Management

Allspring’s Investment Analytics team fulfills a crucial role in managing risk across our investment platform, providing oversight on each investment team’s process as well as analytics to help teams understand investment risks.

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Explore core beliefs

Delivering on a dual mandate: Analytics and oversight

Regulations

A consistent, unbiased framework

We provide advanced analytical capabilities to make portfolio risks transparent to portfolio managers and senior management.

Team

Accountability-based culture

We’ve fostered a culture of accountability to credibly challenge exposures and help consistently generate risk-adjusted alpha.

Company

Automated reporting infrastructure

Our customized analytics, which include daily risk and performance reporting, provide investment teams with a competitive edge.

Brand Idea

Unique analytics and tools

We deliver actionable recommendations through comprehensive risk decomposition, attribution analysis, and portfolio skill assessments.

Analyze risk

The role of investment analytics at Allspring

Many firms rely on “off-the-shelf” approaches for risk management and investment analytics. Unfortunately, standardized solutions may not account for the unique complexities of individual investment strategies, potentially overlooking certain risks or not considering opportunities to improve risk-adjusted returns.

 At Allspring, we augment risk management with investment analytics to maintain transparency, rapidly flag and address unintended risks, and pinpoint opportunities for improvement. We believe our approach offers Allspring’s investment teams a nimble, competitive edge over firms that rely on an “off-the-shelf” type of approach.

Complementing expertise with data and analytics

We employ a hybrid risk analytics platform that combines proprietary software and vended risk models into a highly automated risk reporting infrastructure. Our integrated approach marries risk management with investment analytics to monitor each team’s investment process through time, identifying sources of alpha and risk.

 Key functional sub-teams of Investment Analytics

  • Equity Risk Analytics
  • Multi-Asset-Class Risk Analytics
  • Fixed Income Risk Analytics
  • Mutual Fund Risk Analytics
  • Counterparty Risk Analytics
  • Model Validation and Governance
  • Portfolio Analytics
  • Sustainability Analytics
  • Investment Intelligence
  • Quantitative Insights and Data Science
Quotemark

The Investment Analytics team is embedded within the Office of the CIO to help mitigate risk. That allows us to build stronger relationships with the portfolio managers, empowering them with the risk analytics needed to do their job.

Randy Mangelsen, Co-Head of Investment Analytics

Manage risk

The role of investment risk oversight at Allspring

A universal question that concerns everyone, from our portfolio managers to our clients, is what is an appropriate level of risk? 

Markets can be affected by many types of risks, and each risk’s impact generally varies over time. The Investment Analytics team is responsible for continuously monitoring known risks, anticipating and identifying new risks, and regularly communicating the results of our analyses to all of Allspring’s investment teams.

A consistent, unbiased framework to risk management

Through our advanced analytical capabilities, we aim to provide a consistent, unbiased framework for evaluating investment risk in each strategy across the firm—all in an effort to help portfolio managers deliver on their objectives for clients.

Capabilities Risk assessment | Skill assessment | Portfolio characteristics Daily: Creation and review of risk decomposition and evaluation reports. Monthly: Comprehensive senior management review of significant product risks. Quarterly: Portfolio manager quarterly review meetings focused on performance attribution and risk exposures. Annually: Comprehensive reviews of all trading counterparties. Model risk reviews and validations.

Capabilities in action: Risk decomposition 

  • Provide daily reports using risk models and analytics from industry-leading vendors
  • Assist in the identification of significant risks by decomposing exposures into country, currency, style, sector, and security-specific components
  • Act as a first step in the process of escalating significant market risks to senior management

Capabilities in action: Integrating sustainability analytics

1. Assess a portfolio’s existing sustainability risk exposures

- Portfolio-level analytics leveraging vended and proprietary sustainability metrics

2. Understand the client’s sustainability objectives

- Sustainability decision framework based on stakeholder objectives

3. Provide analytics, insights, and reporting to facilitate integration of sustainability objectives into portfolios

- Negative/positive screening, ESG integration, thematic investing, and impact investing

Capabilities in action: Escalating risks

Our independent investment oversight process complements each team’s embedded risk management efforts. Overseen by the Office of the CIO, the team regularly administers assessments, reports, and analyses to facilitate a better understanding of intended and unintended investment risks.

When a product experiences extreme performance and triggers daily filters, the Office of the CIO enlists our team to conduct an extensive review of the performance drivers.

Organizational chart: Office of the CIO is one part of the chart; and Portfolio Management is another. These boxes in the pie chart include: Credible challenges (pointing from the Office of the CIO box to Portfolio Management; Investment thesis defense of significant risks (pointing from Portfolio Management to Office of the CIO; and Risk mitigation actions (pointing from the Office of the CIO to Portfolio Management. A box for Investment Analytics sits underneath this middle section of the chart, with arrows pointing up to both the Office of the CIO and Portfolio Management, and down to a box with Risk Management Committee and Investment Oversight Committee.

Quotemark

The team strives to make all investment risks, both intended and unintended, transparent to portfolio managers and impels the investment teams to deliver competitive products consistent with client expectations.

John Hockers, Co-Head of Investment Analytics

Monitor risk

Market Risk Monitor: What keeps you up at night?

Each month, the Allspring Investment Analytics team assembles a list of market risks that it believes could influence investment portfolios and releases findings via the Allview Market Risk Monitor.

The report outlines the top 10 current global market risks, ranked by each risk’s probability of occurring and potential impact on global markets. The list is not exhaustive, but rather a short collection of items that answer the question: “As a risk manager, what keeps you up at night?”

In this snapshot of what is included in each Market Risk Monitor, there are 3 sections: 1) An arrow legend with red up arrows, and green down arrows, indicating an increase or decrease in probability of a global impact. 2) A probability legend, with high, medium and low consensus of occurring; and 3) A global impact legend of extreme, high, medium, and low; from an event for the history books (extreme); to an event that might create acute problems in one sector, region or country (low).

The Allview Market Risk Monitor provides a financial ecosystem that leads to how we invest. Our co-chief investment officers consistently challenge portfolio managers to respond to these views based on their diverse perspectives.

Meet our experts
Cultivating a collaborative environment

The Investment Analytics team consists of over 35 professionals, each dedicated to portfolio analytics and portfolio oversight activities.

Related insights

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John Hockers, co-head of Investment Analytics, has a quantitative skillset that’s ideally suited for his role. Read about his background and Allspring’s investment analytics team in this issue of PM Spotlight.  

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