Let’s say I made an investment in Company XYZ by buying shares in it directly through my brokerage. And let’s say I also had a set of investments in my retirement account that were primarily mutual funds, some of which count Company XYZ amongst their holdings. How much Company XYZ would I actually be exposed to?
Not everyone is an institutional portfolio manager who can list their holdings off the top of their head. For those of us who are just passively investing for retirement, saving for our children’s education, or accruing funds for a rainy day, are we any less entitled to a full understanding where our investments are being allocated?
The code pattern “Create visualizations that enable responsible investing” gives users the ability to analyze their investment portfolios. By selecting portfolios stored in the Investment Portfolio API, IBM’s portfolio management service, users can leverage a set of reports that articulate the true holdings and concentrations of an investment portfolio by looking through the funds, structured products, and exchange-traded funds (ETFs) held in the portfolio. This allows users to determine the true concentrations of asset classes, geographies, and industry sectors, as well as actual exposures to individual companies.
This analysis can also be performed on more modern investing themes, such as investigating the “sin” investment exposure (e.g., companies dealing primarily in alcohol, fossil fuels, gambling, tobacco, military), or environmental, social, and governance scoring of a portfolio when attempting to perform socially responsible investing. Users might be surprised at what they find. With this analysis in hand, users can be empowered to make better, more-informed decisions on how to allocate their funds and invest in companies.