Technical Methodology & Specifications

Deep-dive into our calculation engine, institutional benchmarking, and regulatory compliance framework.

1

Our Calculation Engine

CapX100's analytics are built on institutional-grade methodologies used by the world's largest asset managers. Every calculation is designed for audit-trail transparency and regulatory compliance.

Time-Weighted Return (TWR)

TWR = [(1 + R₁) × (1 + R₂) × ... × (1 + Rₙ)] - 1

Where each R represents the return for a sub-period between cash flows. TWR eliminates the distortion caused by investor deposits and withdrawals, providing a pure measure of portfolio manager performance. This is the GIPS-mandated standard for performance reporting.

Brinson-Fachler Attribution

Total Return = Allocation Effect + Selection Effect + Interaction Effect

Brinson-Fachler decomposes portfolio outperformance into two components: (1) Allocation Effect—how well you over/underweighted sectors vs. benchmark, and (2) Selection Effect—how well you picked securities within each sector. This granular attribution helps explain exactly where alpha comes from.

Value-at-Risk (VaR) & Conditional VaR (CVaR)

VaR(95%) = Portfolio Value × Z-score(95%) × Volatility

VaR quantifies the maximum loss expected at a given confidence level (e.g., 95%) over a specific time horizon. CVaR (Expected Shortfall) goes further by calculating the average loss beyond the VaR threshold. Both are critical for MiFID III suitability assessments and stress testing.

Fixed Income Analytics

Modified Duration = -dP/dY × (1/P)

We calculate duration, convexity, key rate durations, and spread duration for every bond holding. This enables precise interest rate sensitivity analysis and supports SEC Marketing Rule evidence for fixed-income performance claims.

2

Institutional Benchmarking

How CapX100 compares to industry-standard platforms used by the largest asset managers globally.

MetricCapX100Bloomberg PORTAladdinStatPro
TWR Performance✓ Full✓ Full✓ Full✓ Full
Brinson-Fachler Attribution✓ Full✓ Full✓ Full✓ Full
VaR/CVaR Risk✓ Full✓ Full✓ Full✓ Limited
Fixed Income Duration✓ Full✓ Full✓ Full✓ Full
Decimal Parity (2 decimals)✓ 0.01✓ 0.01✓ 0.01✓ 0.01
GIPS 2025 Ready✓ Yes✓ Yes✓ Yes✓ Yes
Deployment ModelServiceSoftwareSoftwareSoftware

Key Difference: While CapX100 matches institutional-grade calculation standards, we deliver results as a service—no software licensing, no implementation projects, no IT overhead. You get the analytical depth of a €50B+ asset manager's quant team without the cost.

3

Sample Output

Example of the analytical output you'll receive. This is based on a synthetic €500M portfolio with 60/40 equity/fixed-income allocation.

Performance Summary

YTD Return

+8.42%

Benchmark Return

+7.15%

Outperformance

+127 bps

Volatility

9.23%

Attribution Analysis
Allocation Effect (Sector Over/Underweight)+52 bps
Selection Effect (Security Picking)+68 bps
Interaction Effect+7 bps
Total Outperformance+127 bps
Risk Metrics

Sharpe Ratio

0.91

Sortino Ratio

1.34

Max Drawdown

-12.4%

VaR (95%)

-1.52%

CVaR (95%)

-2.18%

Beta

0.98

4

Regulatory Compliance Mapping

How CapX100's analytics satisfy regulatory requirements across major jurisdictions.

GIPS 2025 (Global Investment Performance Standards)

Requirement: Chain-linked TWR, full calculation transparency, composite construction, and verification.

CapX100 Solution: We calculate chain-linked TWR for every composite, provide full audit trail documentation, and generate GIPS-compliant verification reports. All calculations meet GIPS 2025 precision standards.

SEC Marketing Rule 206(4)-1 (US)

Requirement: Fair, balanced, and substantiated performance advertising. Must include benchmarks, risk metrics, and disclaimers.

CapX100 Solution: We generate SEC-compliant performance reports with benchmarking, risk-adjusted returns (Sharpe, Sortino), and required disclaimers. Every claim is backed by documented calculations.

MiFID III (EU/UK)

Requirement: Suitability and appropriateness evidence. Risk profiling, scenario analysis, and cost-benefit analysis.

CapX100 Solution: Our VaR/CVaR analysis, stress testing, and scenario outputs provide the quantitative evidence needed for MiFID III suitability documentation. We generate client-ready risk reports.

FCA Consumer Duty (UK)

Requirement: Fair value evidence, cost-benefit analysis, and outcome tracking.

CapX100 Solution: We provide fair value evidence through performance attribution, cost analysis, and risk-adjusted return metrics. All outputs support FCA Consumer Duty compliance.

Ready to Deploy Institutional-Grade Analytics?

Schedule a technical consultation to see how CapX100's methodology maps to your firm's needs.