Investment Products and Services Launches

AlphaCore launches risk factor analytics tool, and Franklin Resources adds to fixed income team.

AlphaCore Capital has announced the launch of factorE—a wealthtech tool built for intelligent investing. Powered by machine learning, factorE uncovers the risks and exposures of multi-asset portfolios through visual simulations on a single interface. AlphaCore designed factorE to help advisers, portfolio managers and analysts better understand the factors impacting today’s diverse portfolios.


“Our team at AlphaCore searched for a solution to effectively manage complex portfolios that may hold a combination of mutual funds, ETFs, stocks, commodities, and alternative investments,” says Dick Pfister, CEO and founder of AlphaCore. “When we couldn’t find one, we partnered with a team of developers who have worked with Qualcomm for decades to create a new proprietary wealth analytics tool.”


The factorE tool allows advisers to build and analyze portfolios with easy to digest visuals that illustrate the risk factors of a portfolio and expose risks that previously may have been hidden.


Understanding risk factors is especially important for the financial adviser seeking to incorporate alternative investments. “The market volatility we’ve seen so far this year combined with the potential for a continued rise in interest rates highlights the importance of diversification,” says Jonathan Belanger, director of Research at AlphaCore and architect of factorE.” factorE helps to evaluate factor exposures and can empower users to create an effective allocation strategy for achieving long-term portfolio objectives.”


factorE allows users to look at a variety of risk factors including equity, duration, momentum, value, and credit, along with alternative risk factors like trend following, illiquidity, and hedge fund crowding. This new tool augments more traditional returns-based analysis with machine learning capabilities, enabling users to handle traditional strategies alongside alternative strategies such as long/short equity, relative value, event driven, managed futures and option-writing.


Franklin Adds to Fixed Income Group 


Franklin Resources, Inc., which operates as Franklin Templeton Investments, announced the acquisition of Random Forest Capital, LLC (Random Forest), an investment firm with expertise in data science and non-bank marketplace lending. Following the acquisition, the Random Forest team will join the Franklin Templeton Fixed Income Group investment team. Terms of the transaction were not disclosed.


Jenny Johnson, president and COO of Franklin Templeton Investments, says, “We continue to make strategic investments and acquisitions in emerging investment-related technologies to augment and support Franklin Templeton’s global offerings. The Random Forest team will complement our existing fundamental fixed income research with their expertise in private lending and bring the capability to support the firm’s broader information technology and data science initiatives.”


Random Forest approaches investment management from the perspective of data science, in which machine learning and statistical algorithms are applied to solve for expected gains in financial investments using complex models. They have built cloud infrastructure that enables them to take massive amounts of unstructured data to not only gain key insights, but also to find new predictive power in the data.