How does risk management work at the portfolio level in Fincanva?

Fincanva allows you to add an extra layer of protection to your portfolio by enabling Risk Management rules at the portfolio level. These rules help your portfolio dynamically adapt to changing market conditions by adjusting its allocation approach when specific triggers occur.

What Is the Risk-Off Feature?

At the core of Fincanva’s Risk Management system is the Risk-Off feature. Risk Off allows your portfolio to:

• Switch from its primary allocation method (e.g., Risk Scaling)

• Move to an alternative, more defensive allocation (e.g., Fixed Weights, or a heavier allocation to conservative models)

• Only when specific market conditions are triggered

This gives your portfolio the flexibility to respond automatically to market stress or volatility spikes, without requiring manual intervention.

Key Components of Portfolio Risk Management

You define two essential elements when setting up Risk Management:

1. Trigger(s): Conditions based on market indicators that activate the Risk Off state. When a trigger is activated, the portfolio enters a Risk-Off mode.

2. Alternative Allocation: Defines how your portfolio reallocates capital during Risk Off.

Once Risk-On conditions are met, your portfolio will revert to its primary allocation method automatically.

Why Use Portfolio-Level Risk Management?

By activating Risk Management, you can:

• Protect your capital during periods of high uncertainty

• Reduce drawdowns and avoid full exposure during market downturns

• Maintain systematic discipline, removing emotional reactions from decision-making

Risk Management helps you build portfolios that are not only optimized for growth, but also resilient during stress.