Fiera Capital selects Axioma to connect portfolio construction with risk analysis

Fiera Capital has selected SimCorp’s Axioma Risk and Axioma Portfolio Optimizer, combining tools for understanding portfolio exposures with software for constructing positions around investment objectives. SimCorp announced the mandate on 20 October; it did not give a completed implementation date.[1]

The stated scope includes equity and fixed-income risk models aligned with Fiera’s strategies, including Canadian and regional North American models. That focus makes the selection more specific than adopting a generic group-wide risk dashboard: the modelling is intended to reflect the markets and portfolios the investment teams manage.[1]

From measuring risk to choosing positions

Axioma Risk’s published capabilities include decomposing changes in risk by portfolio groups or factors, testing hypothetical trades and hedges, and applying historical or macroeconomic stress scenarios. The system supports full repricing as well as broader factor-based analysis. These are vendor-described product capabilities, rather than measured results from Fiera’s deployment.[2]

Those functions answer different questions. A risk decomposition helps explain which exposures contribute to a portfolio’s risk. A stress test asks how the portfolio might respond to a specified disturbance. Testing a proposed hedge before execution can show whether it addresses the targeted exposure or simply changes the mix of risks.[2]

Portfolio Optimizer addresses the construction decision. SimCorp says it supports multiple risk models, adjustable objectives and constraints, and scheduled batches of portfolio rebalancing. It can also use custom or third-party models and datasets, allowing an investment process to retain inputs beyond the vendor’s own model range.[3]

For example, tightening a hypothetical concentration limit can change the positions selected and the objective the portfolio can achieve. The optimiser’s published constraint-analysis functions are designed to expose that trade-off. The investment team still has to decide whether the constraint reflects its mandate and whether the inputs are appropriate.[3]

For trading and investment operations, the connection between the two tools is commercially relevant: portfolio construction can use a common account of risk before generating changes for execution. SimCorp describes that shared analytical framework as the aim of the Fiera engagement. The announcement does not quantify implementation savings or a change in investment performance.[1]

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