Published. August 21, 2025
How can Venn help with analyzing portfolios with leverage and short positions?
Clients can add line items to their portfolios with negative allocations to denote either negative cash, for when leverage is being used, as well as short positions in underlying securities.
How do I designate cash positions and what happens when I do so?
If your line item represents a positive cash holding, click the ellipsis to “Designate as Cash Holding.” Venn will then use the returns of the “Local Cash Rate (USD)” investment in its place.
If your line item represents negative (borrowed) cash, click the ellipsis to “Designate as Cash Borrowing.” Venn will then use the returns of the risk-free rate (Local Cash Rate) in its place and subtract “SOFR + 30 bps” to incorporate borrowing costs. 30 bps refers to the General Collateral spread. Please note that the “SOFR + 30 bps” is subject to change.
Cash designation is important for exposures and leverage ratios to be accurately calculated. If there are any cash and cash equivalents that are not explicitly designated as Cash Holding or Cash Borrowing, Venn will treat it as an investment.
What if there are multiple “cash” line items in a portfolio?
Venn will aggregate all line items together that are designated as “Cash Holdings” or “Cash Borrowing” by simply summing them up. For risk and returns attribution, this will be displayed as “Aggregate Cash.”
What new metrics are available for leverage and shorting?
Metrics listed below can be found in the "Leverage/Exposure" section of the metrics list available on the Performance and Risk block in both Studio and Report Lab.
NAV (Net Asset Value): Long positions - |Short positions| + Cash
Gross Exposure: Long positions + |Short positions|
Net Exposure: Long positions - |Short positions|
Gross Leverage Ratio: Gross Exposure / |NAV|
Net Leverage Ratio: Net Exposure / |NAV|
What about Holdings blocks?
When a portfolio has a short position and/or a position designated as Cash Borrowing, Venn will ignore those positions and show the long positions rescaled.
This document highlights certain aspects of this feature. As an overview, it does not discuss all material facts or assumptions. Please see Important Disclosure and Disclaimer Information.