Case Study: Portfolio Management

Portfolio Managers or Defined Contribution Administrators must be able to determine a blended Net Asset Value depicting net gain or loss in a given Portfolio or 401K Plan.

Problem

Establishing the average rate of return in a Participant’s 401K Plan based on Equities, Mutual Funds, Government Funds and Guaranteed Insurance Contracts is a very difficult task.

Based on market performance, the value of Investment Options in a Plan changes on a daily basis. Portfolio Managers and Plan Participants need to have the capability to monitor their real rate of return in a portfolio or plan, on a daily basis.

At this firm, as the number of plans an Administrator had to handle increased and investment combinations expanded, it became more and more difficult to calculate total performance for a Plan Participant or Portfolio Manager. When and if a blended NET ASSET VALUE could be made available it was at least 90 days old and cost a great deal to produce.

Solution

To address this problem, REF set out to build an automated system that consolidates the performance values of Mutual Funds, Government Funds and Guaranteed Insurance Contracts (GIC) under one portfolio and establishes a blended Net Asset Value for the entire Portfolio or Plan.  This solution became a software product called Cashtrac™.

Cashtrac™ is software that analyzes all transactions for the day and produces a blended return on the portfolio. A blended NET ASSET VALUE can be calculated for a given portfolio on a daily basis. Accrual calculations are updated along with maturities and partial payments on a daily basis enabling the Plan Administrators to keep the Portfolio or Plan current.

CashTRAC™:

calculates your portfolio in a matter of minutes. CashTRAC™ drastically reduces man-hours, which translates into productivity, profitability and customer satisfaction.

provides daily Unit Pricing for the Record Keeping system.

brings stability and accuracy to your operating environment. No longer will you have to keep customers waiting in order to give them the value of their portfolio.

produces reports required to manage and reconcile the 401K Plan or Portfolio.

reconciles with the carriers and the Record Keeping system.

can electronically transmit blended NET ASSET VALUE to the Record Keeping system, Call Center system and Statement processing areas.

provides an automated way of developing blended NET ASSET VALUE each day for all the the 401K Plans and Portfolio Managers. Prior to CashTRAC™, a blended Net Asset Value rate of return could only be made available on a quarterly basis.

 

Back to Case Studies