MSCI Inc. unveils MSCI AI Portfolio Insights, integrating artificial intelligence with advanced analytics to aid in identifying and managing risks for institutional investors. The tool offers interactive capabilities and aims to enhance communication and efficiency within investment teams.
MSCI Unveils AI-Driven Tools for Advanced Risk Management and Analysis
On June 10, 2024, MSCI Inc., a prominent provider of decision support tools for the global investment community, launched MSCI AI Portfolio Insights. This new offering integrates generative artificial intelligence (GenAI) with MSCI’s advanced analytical and modelling technologies, aiming to enhance investors’ ability to identify and manage emerging risks in dynamic markets.
MSCI AI Portfolio Insights merges GenAI with the company’s established risk and performance modelling capabilities to improve risk reporting and create operational efficiencies. The goal is to enable institutional risk and portfolio managers to identify and analyse critical information, thus aiding decision-making processes ahead of the working day.
The tool provides interactive capabilities, allowing investors to delve deeper into portfolio changes without needing coding skills or navigating complex user interfaces. By combining generated text with modern dashboards and cloud-based technology, MSCI aims to enhance communication and efficiency within risk and portfolio management teams. This tool is tailored for asset managers, hedge funds, and asset owners, aiming to foster collaboration across investment teams.
Historically, risk managers have dedicated significant resources to integrate complex models that process, clean, generate, store, and extract necessary data for comprehensive risk and performance overviews. Currently, risk leaders face increased pressure to deliver expansive risk monitoring and advisory services across growing portfolios. Additionally, challenges such as climate change, geopolitical tensions, macroeconomic uncertainties, and technological advancements present new investment considerations for risk managers to oversee.
MSCI AI Portfolio Insights employs proprietary algorithms to curate extensive data, identifying key factors impacting risk and performance and linking them to relevant market events. Additionally, the tool includes an AI agent capable of elucidating and breaking down risk and performance drivers. This assistant can address complex portfolio queries through natural language interaction.
Commenting on the launch, Ashley Lester, Chief Research Officer at MSCI, noted, “Institutional investors must evolve their risk teams from being predominantly control-oriented to focusing on investment. With MSCI AI Portfolio Insights, we are transforming risk reporting to be more insightful and accessible to decision-makers. Risk should involve providing actionable insights to investors.”
In conjunction with this launch, MSCI introduced the Macro Finance Analyzer, utilising the firm’s financial modelling and stress-testing capabilities. This tool is designed to assess how changes in macroeconomic conditions can impact portfolio risks and returns across asset classes, aiding asset allocation decisions. Users can test various conditions, adjusting for dynamic market events and trends, including interest rate fluctuations or shifts in long-term economic growth.
Jorge Mina, Head of Analytics at MSCI, remarked, “We’ve noticed a shift in the relationship between investment and risk management teams, influenced by senior investment leaders’ demand for integrated risk analytics. Risk teams must modernise processes, seek efficiencies, and enhance their advisory role. MSCI now provides the necessary toolkit on a single platform.”
Both tools are hosted on MSCI ONE, a cloud-based platform launched in 2022. The platform offers flexible distribution, cloud delivery, dashboards, and visualisations, enabling users to navigate MSCI’s analytics seamlessly, identify key insights, innovate, and build better-performing investment portfolios.
MSCI Inc. is a leading provider of decision support tools and services with over 50 years of expertise, helping clients understand risk and return factors to build effective portfolios. The tools aim to foster transparency and improve investment decision-making processes.
