Press Releases

New Software Gives Money Managers Broader capability to Analyze Stocks for Suitability Investment Performance

Web-based technology offers increased efficiency, improved analytical tools for asset managers overseeing accounts with client guidelines based on corporate practices

PORTLAND, Maine, June 22, 2004 — A new Web-based software application that significantly expands the ability of money managers to use input on corporate practices in analyzing investment opportunities has been introduced by IW Financial.

Available starting July 1, 2004, IWF Workstation combines research on corporate practices and emerging risk factors with client-specified investment guidelines to provide the most dynamic picture yet of the investment suitability of more than 2,000 publicly-traded equity securities.  

"As the last few years have indicated, corporate practices can dramatically impact shareholder value," stated Sam Pierce, chief executive officer at IW Financial. "The challenge from an investment management point of view is to identify good investments that resonate with client priorities. Our software gives firms a more efficient tool for selecting stocks and managing portfolios in a more personalized fashion, an approach that investors increasingly demand."

The IWF Workstation represents the next stage in implementing investing strategies that take into account the performance impact of both positive and negative corporate practices, providing asset managers with a dynamic tool for evaluating companies and analyzing the interaction between corporate behavior and financial returns. Portfolio managers can quickly and easily access new information that falls outside of traditional financial analysis, including narrative commentary on a company's practices. With this data at hand, the manager is ideally positioned to identify investment opportunities and build portfolios, while closely adhering to all applicable investment guidelines.    

Historically, investor exclusions eliminated entire industries from consideration, such as oil and gas (environmental concerns) or tobacco (health). This made it difficult for portfolio managers to maximize returns while maintaining proper diversification. Using software from IW Financial, managers can find the holdings within a sector or industry that most closely meet the client's investment criteria. This enables the portfolio manager to maintain sector weightings and diversification.

For example, a client may express strong concerns about toxic emissions and spills. Rather than excluding all companies that have spills or emissions, eliminating entire sectors from consideration, the portfolio manager has the option of quickly identifying the companies that are doing the best job of reducing these liabilities. Another benefit of the system includes the ability to ensure compliance with client-specified investment guidelines. IW Financial is currently developing a comprehensive governance module which will be available later this year.

Growing evidence of the importance of corporate practices

An increasingly large pool of professionally managed assets is subject to some kind of screening based on a wide range of corporate practices. From 1995 to 2003, assets in this category grew by more than 240 percent to $2.16 trillion, according to a report published in 2003 by the Social Investment Forum. This is due to a combination of heightened awareness of issues resulting from corporate scandals, increased investor demand for personalization, and a growing body of evidence that corporate practices impact shareholder value. For example, a new report issued by the Global Environmental Management Initiative (GEMI) determined that between 50 and 90 percent of a company's market value is created by intangible assets such as environmental, health, and safety performance.

The IWF Workstation is designed to help asset managers identify opportunities and evaluate risks as well as attract and manage new assets from the growing pool of investors concerned about corporate practices. Among the characteristics that can be evaluated are environmental policies, animal testing, human rights, labor relations, alcohol, gambling, contraceptives, tobacco, and board issues. Portfolio managers can choose to broadly exclude or include stocks based on these categories, and on client specifications. The software can be customized to incorporate input from a money manager's own proprietary research, or from third party research providers. Unlike some products in the category, the IW Financial software does not attempt to impose a particular value system on the user.

"The technology is designed to accommodate a broad range of core values and investment objectives," said Pierce. "For example, an environmentalist and a hunter may share concerns over preserving the environment, but differ on weapons manufacturing. Our software works equally well in building portfolios that address the core values of both."

About IW Financial
Founded in 2000, IW Financial is a leading provider of technology solutions that enable financial professionals to manage risk, differentiate their services, and strengthen relationships with clients. IW Financial's proprietary technology eliminates the perceived conflict between investors' ethical standards and portfolio returns by making it easy to incorporate important non-financial criteria into the investment process. IW Financial offers its software to the market through the IWF Workstation, designed for money management professionals, and the IWF Advisor, created for financial advisors and broker/dealer networks.

Dan Porter
VP of Marketing
IW Financial
207-773-2333

Mike MacMillan
MacMillan Communications
212-473-4442
info@macmillancom.com