They attracted exchange-traded funds (ETFs). record inflow of $53 billion in 2021,(1) an increase of 27% compared to 2020, and in the first quarter of 2022 $5.0 billion in January 2022,(2) $3.9 billion in February 2022(3) AND $4.8 billion in March 2022.(4) However, despite their continued popularity, ETFs are not prioritized in portfolio analytics solutions.
Emily Choi, Director of Advanced Analytics at TMX
TMX LOGICLY* aims to change that, says Emily Choi, director of advanced analytics at TMX. Launched by TMX in March 2021, TMX LOGICLY is an analytics platform that streamlines investment research, asset allocation, portfolio construction and client reporting in one unified, cost-effective system for financial advisors, portfolio managers and research teams.
“Most vendor solutions try to fit ETFs into the mutual fund mold,” Choi says. “TMX LOGICLY prioritizes ETFs and also serves mutual funds and segregated funds.”
Choi emphasizes that wealth management professionals are simply not needed more data and analysis. What they really need is this Normal data and analytics built into tools they were already using in other areas of their work. Additionally, they need solutions that recognize that trading ETFs is very different from trading mutual funds, so for analytics to be useful it must take into account variables relevant to ETFs, such as spreads and liquidity.
“We really try to distill this data in a meaningful way to inform decision-making. For example, instead of showing just one static risk rating for a fund, we’ll show risk over time as it evolves and changes with market movements. It is a richer dataset (because) there is not just a data field; there is a chart that contextualizes the information.… It’s not just about looking at one thing in isolation.”
The use of artificial intelligence
Artificial intelligence (AI) is built into TMX LOGICLY to help advisors optimize ETF portfolios.
“Artificial intelligence can be applied in many different ways. We use it as part of the investment research and evaluation process,” Choi says. “Advisers can research similar funds and compare recent performance or returns. They can also research new investments and model how they will impact their portfolios.”
TMX LOGICLY offers suitable alternatives from a world of over 1,000 ETFs and 24,000 investment funds. It also monitors portfolios in the background and alerts advisors when a security’s risk profile changes or markets change.
At the same time, the platform’s technology provides advisors with another data point to navigate customer-centric reforms, including “Know Your Customer” and “Know Your Product” responsibilities. In particular, TMX LOGICLY provides comprehensive reports for clients and automatic documentation of the investment decision-making process.
As a result, TMX was among the seven candidates selected to participate OSC Test LaboratorySpring 2022 test to demonstrate “increased availability of product information” and “improved information sharing and improved customer interactions.” Advisors and companies can sign up to test the platform by running a series of frequently performed tasks and comparing the results with manual processes.
Overall, what excites Choi most about TMX LOGICLY is its potential to drive better investment decision-making.
“We believe that better data and analytics level the playing field for advisors and their clients and help TMX achieve our overarching goal of growing the investment ecosystem.”
* TMX is a trademark of TSX Inc. and Logicly is a trademark of SigmaLogic Inc. and is used under license.
This information is provided for informational purposes only. Neither TMX Group Limited nor any of its affiliated companies guarantee the completeness of the information contained in this publication and we accept no liability for any errors or omissions in the use of or reliance on the information. This publication is not intended to provide legal, accounting, tax, investment, financial or other advice and should not be relied upon for such advice. The information provided does not constitute an invitation to purchase securities listed on the Toronto Stock Exchange and/or the TSX Venture Exchange. TMX Group and its affiliates do not endorse or recommend any securities mentioned in this publication. TMX, TMX project, The future is yours and Voir le futur. Realiser l’avenir. are trademarks of TSX Inc.
(1) Source: National Financial Bank Inc., January 6, 2022
(2) Source: National Financial Bank Inc., February 3, 2022
(3) Source: National Financial Bank Inc., March 2, 2022
(4) Source: National Financial Bank Inc., April 4, 2022
