SD-05.2 — Portfolio Management & Monitoring

Business Domain: BD-05 Portfolio Management (Front office) · Applies: BOTH

Purpose

Runs the ongoing oversight of a portfolio against its objectives, benchmark and constraints — the feedback step of the portfolio-management process. Where SD-05.1 builds the target portfolio, this Service Domain watches the live one: it detects when the portfolio has drifted from target, when the investor’s circumstances or the market have changed enough to matter, and when a risk limit is approached — and it fires the triggers that the rebalancing, overlay and transition domains act on.

Service Operations

Monitor portfolio drift — track the live holdings against the target portfolio and the policy bands.
Monitor against mandate and benchmark — confirm the portfolio still conforms to the mandate and track performance against the benchmark (consuming BD-09’s measurement).
Monitor ex-ante risk — track tracking error, value-at-risk, factor exposures and concentration against the risk limits.
Monitor changes in circumstance and market — investor-circumstance changes and shifts in capital-market conditions that warrant a portfolio review.
Generate exceptions and triggers — raise the drift, risk and review exceptions and fire the triggers consumed by SD-05.3, SD-05.4 and SD-05.8.
Run the portfolio review cycle — the periodic portfolio review and its reporting to the investment committee.

Inputs and outputs

Inputs: the live portfolio and prices; the target portfolio (SD-05.1); the mandate and risk limits; the benchmark; updated capital-market expectations.
Outputs: drift and exception reports, risk dashboards, and the rebalance / adjustment triggers — consumed by SD-05.3, SD-05.4, SD-05.8 and the investment committee.

Entities

Consumes: Holding / Position (E-04, book = ibor), Valuation (E-07, any method), Benchmark / Index (E-10), Risk Limit (E-16), Risk Measurement (E-19, any risk_type); the mandate facet of E-03 from SD-01.2; the SD-05.1 target portfolio.
Owns: the portfolio facet of E-03 Portfolio / Mandate — the live holdings container, the constraint-monitoring subject, the report subject. SD-05.2 is the ongoing authoritative source for the portfolio’s operative state; the mandate facet (objectives, return target, risk appetite, constraints) is owned by SD-01.2 Investment Mandate & Policy Definition under the faceted-ownership pattern recorded in ownership-map.md. E-03 is the model’s only faceted entity.

Standards

The CFA Institute portfolio-management process — the monitoring-and-rebalancing feedback step. No single external standard governs portfolio monitoring.

Open extensions

The boundary with BD-07 Investment Risk — SD-05.2 monitors the portfolio as the manager’s own oversight; BD-07 is the independent risk function.
The boundary with SD-10.1 — SD-05.2 monitors drift and risk; SD-10.1 runs the compliance rule engine.