With the heavy market turbulence of the past few months, those res-ponsible for pension fund assets must have wondered about how quickly it would be possible to turn their portfolios into cash, should the need arise.

This is exactly the question the Liquidity Watch service has been designed to answer. The system provides a regular monitoring analysis aimed at evaluating the liquidity of a fund, referring to the tradability or marketability of a fund. In other words, the number of days it would take to liquidate any portfolio.

From a pension fund managers' viewpoint it can provide a means of seeing that mandates and their scheme guidelines are in place, or at the very least, are within a comfort zone and remaining there.

The system provides a quarterly re-port on the portfolio's liquidity, so that any potential problem areas are highlighted. The number of shares held is divided by the average annual trading volume of the a stock from which the liquidity profile is produced. So if, for example, the profile shows that 80% of the fund can be liquidated in five days, this provides a quantifiable view.

The analysis is based on historic in-formation from stock market sources and all globally-listed equities are covered. Any difficult stocks or those that have potential trading problems can be highlighted. Obviously, one of the major advantages of the service is that the liquidity is monitored regularly on an ongoing basis, which means that any one stock or group of stocks does not put the fund at risk.

The service is run independently of the investment managers and so does not interfere with the investment process, says AGF International Advisors, the Dublin-based company that provides Liquidity Watch.

All that is needed for the analysis is a list of the shares held, the number of shares in each holding, the Sedol code of each stock and the price of the stock at valuation date.

It can also be used by pension funds during transitions periods with investment managers to allow a managed transfer process.