Risk Exposure Snapshot

Overview

The Risk Exposure Snapshot component allows you to decompose the risk embedded in a portfolio according to Morningstar’s Global Risk Model. This component displays the most recent month-end portfolio date available and compares exposures to a benchmark.

By tracking a portfolio’s underlying economic exposure to 36 intuitive risk model factors, including six unique to Morningstar, the Morningstar Global Risk Model shows how the portfolio could behave in a variety of market conditions. These factors are grouped into four main categories as follows:

•style

•sector

•region, and

•currency.

A factor is an observable condition (such as value/growth or market sector) appearing to influence asset returns. A factor exposure is a numeric measure of how much a particular asset tends to be affected by a factor. Exposures can be positive, negative, or zero, and can change over time.

Use the Risk Exposure Snapshot component to identify strategy changes related to multiple factors and the associated risk premiums (the returns attributed to the specific factor).

For capabilities common to most components, read the Components Overview.

Last Updated: March 9, 2018

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