How to use Portfolio Analysis

inStream's Portfolio Analysis from inStream Solutions on Vimeo.

inStream’s Portfolio Analysis feature allows advisors to create, analyze, and consolidate client investment holdings and incorporate these portfolios into your client’s plan to help make better recommendations for a successful plan outcome.

By default, inStream will use Morningstar data for all calculations.  Expected Risk and Return values can be customized in the Asset Class Translator if your firm chooses to use your own capital market assumptions.

Creating Client Portfolios

 The first step in the portfolio analysis tool is to inputting the holdings in the client portfolio.   The term “Portfolio” is used to refer to the actual holdings of a portfolio and is different from an allocation model, where asset class allocations are used.

1. Login to inStream, select the client you will add a portfolio for and navigate to the “Portfolio” tab.
2. By default, the Portfolio List will be expanded, and all portfolios will be listed. Click on ‘Add a New Portfolio”.

 

3. Name your portfolio.  Now you have 3 options to add your holdings to the portfolio.

Adding tickers one at a time

If you only have one or two tickers to enter, you can manually search for the security by entering the ticker or typing the security name. 

In the portfolio creation modal, enter a security ticker, and then choose from the search results.

When adding a security to a portfolio, you can choose between entering the number of shares or the dollar value of the position.  If you enter number of shares are used, then the amount will be calculated using the price of the security from the last day of the previous month.

 Uploading the CSV template

 If you have a big list of tickers, you can download a csv file right here [show link] and populate the ticker and the shares OR amount , upload the file and inStream will determine the value.

Download the CSV template at the bottom of the portfolio creation modal.

We suggest that as you collect account statements, to transfer that data into a csv template.  The template itself is very simple, with only three columns: Ticker, Shares, and Amount.

Enter your data into a csv for easier uploading.

When entering data into a CSV template, here’s a few pointers to keep in mind:

Each row with data must have a ticker symbol

1. If shares are left blank, please be sure to enter an amount
2. If amount is left blank, please be sure to enter number of shares
3. If values are entered for both shares and amounts, the csv uploader will use the number of shares
4. Data may be formatted as a dollar amount, or as a number.
5. No matter how many decimals are entered, the CSV uploader will round to the 1000^th decimal point.

 

Logic is applied to the CSV template to improve user experience. Please see the pointers above.

Once your csv is ready, be sure to save it for easy access, and then upload the file by clicking on the Blue Upload button in the portfolio creation modal.

Pasting securities to create a portfolio

The third method, allows you to copy and paste your data.  After you’ve compiled holdings data into the csv template, you can literally copy and paste that data into the inStream portfolio creation modal.  This is great if you’re throwing together a handful of securities, but even if you have a portfolio of 100 securities, this will still work.

 Using exactly the same csv upload template, simply enter in your data. 

 When copying the data, there are a few pointers to keep in mind.

1.  Ignore the headers when copying your data
2. If using amounts, please be sure to copy the blank shares column
3. If using number of shares, it is not necessary to copy a blank amount column.

 

When copying data, please be aware of the pointers above.

 4. Once your are done adding securities remember to click SAVE.

What if Morningstar doesn’t recognize my security?

If Morningstar doesn’t have data on a security, you can enter the ticker and click add, then  you can type in the name, choose an appropriate asset class, and apply the number of units and value. This is a useful for individual bonds and any security where we are not getting historical data.

What if I don’t agree with Morningstar’s asset classification?

Even if we do have data for a security, you might still disagree with Morningstar’s asset class categorization, and this is where you can make a change.  We have 56 asset classes available and you just select the appropriate asset class for that security.  This is also where you can edit the units or the total value of the position.  Keep in mind that we use pricing data as of the end of the last month, and that gets updated around the 5^th day of each month.

Once the data is pasted, you can revise the allocations or change the asset class categorization.

Upon saving the investment model, the portfolio will then be available to be used in portfolio comparisons, and also in plans.

 Portfolio Analysis Output

Now that the portfolio is created, we can view the analysis.  Once you save the portfolio, the analysis will open automatically.  We will take a look at each section of the report to explain the analysis shown.

Hypothetical Growth of $10,000:

The graph reflects how $10,000 invested in the portfolio would look if it was held for the last 10 years. If securities in the portfolio have less than 10 years of historical returns or if securities are not recognized by Morningstar, these securities proxy the Morningstar Index associated with the asset class. For all other securities, calculations will be based on actual historic returns. The calculation assumes that the portfolio rebalances on an annual basis, starting with the earliest common inception date.

 In the top left, a benchmark index may be selected to compare against the portfolio.  In the top right, the portfolio holdings may be edited, the analysis output may be downloaded, or the entire portfolio can be deleted.

 

 The Growth of $10,000 shows how the portfolio would have grown from the past to today.

Expected Risk and Return:

The Expected Risk and Return is calculated based on the returns and standard deviation defined by the Custom Asset Classes. If users choose to incorporate the investment portfolio as part of their financial planning, the plan allocation will reflect the Expected Risk and Return of the portfolio.

The Risk & Returns table shows the annualized return, average 1-yr return, and standard deviation of the portfolio.  In all cases, the risk and returns numbers are calculated from the earliest common inception date of the portfolio to the end of the last month.  The annualized return is the geometric average of the portfolio returns, whereas the average return is the arithmetic average.

Asset Class Allocation:

Asset Class Allocation will reflect the percentage breakdown of asset classes associated with the portfolio.  When uploading a portfolio into Portfolio Analysis, each security must be mapped to an asset class. For securities that are recognized by Morningstar, inStream will provide a default asset class for these securities. For securities that are not recognized by Morningstar, the user can select a corresponding asset class.   

Portfolio Holdings:

Portfolio Holdings will show the following information associated with each security: Ticker, Name, Asset Class, Units, Value, and Weight. For securities that are not recognized by Morningstar, user will have to input the above information for each security.

Top 10 Regions Breakdown:

Reflects the top 10 regions associated with the portfolio holdings.

  

 Top 10 Countries Breakdown:

Reflects the top 10 countries associated with the portfolio holdings.

 

Valuation Statistics:

Valuation Statistics will calculate the 12-Month Yield, P/E Ratio, and P/B Ratio of the portfolio based on the security’s weight and values. It will not include the statistics for securities not recognized by Morningstar.

 

Cost

Cost will calculate the Prospectus Net Expense for all funds in the portfolio that are recognized by Morningstar.

 

Style Box:

The Style Box provides a percentage breakdown of the portfolio in terms of size (large, mid, small) and style (value, growth, blend). It will reflect the asset allocation of portfolio holdings defined by the user.

Annualized Returns:

The report will calculate the 1, 3, 5, 7, and 10-Year Annualized Returns for the portfolio based on the security’s historical prices. If securities in the portfolio have less than 10 years of historical data, inStream will proxy securities to Morningstar indices corresponding to the security’s asset class.

Performance:

The report calculates the Lowest 1-Year Performance, Lowest 3-Year Performance, Highest 1-Year Performance, and 3-Year Highest Performance of the portfolio. Calculations will be based on the security’s historical returns. If securities in the portfolio have less than 10 years of historical data, inStream will proxy securities to Morningstar indices corresponding to the security’s asset class.

  

 3-Year Rolling Returns:

The report calculates the 3-Year Rolling Returns of the portfolio based on the security’s historical returns. If securities in the portfolio have less than 10 years of historical data, inStream will proxy securities to Morningstar indices corresponding to the security’s asset class.

 5-Year Rolling Returns:

The report calculates the 5-Year Rolling Returns of the portfolio based on the security’s historical returns. If securities in the portfolio have less than 10 years of historical data, inStream will proxy securities to Morningstar indices corresponding to the security’s asset class.

 

 Portfolio Comparison

The portfolio comparison tool is designed to analyze two portfolios, side-by-side, and to show the difference between the two portfolios.  This tool utilizes the same portfolio analysis features as provided in the Portfolio Analysis tool, but also adds some analysis and characteristics.

How do I compare two portfolios?

When viewing a client, click on the Portfolio tab, then on the left side of the screen, click on Portfolio Comparison.

In the Portfolio Comparison tool, you can choose from three drop down boxes.  Use these to select a Portfolio that you’ve already created for the client, and compare that with another portfolio.  You can also compare against a benchmark index.

In both the Actual Portfolio and Target Portfolio drop downs, there are three categories to choose from: Client Portfolios; Advisor Portfolios; and Firm Portfolios.

 

 Portfolio comparison tool allows two portfolios to be analyzed, side-by-side.

 

The analysis allows you to view and compare performance and the characteristics of each portfolio.

  

Compare historic annual total returns of two portfolios and a benchmark in one graph.

Creating Advisor Investment Models

Advisor investment models are portfolio models that are specific to the advisor.  These advisor investment models are constructed with security tickers and allocation percentages, and once created, become available in the portfolio analysis tool.

Where to create an Advisor Investment Model?

Add an Advisor Investment Model in Settings > Investment Models

1. When logged in as an advisor, click on the Settings tab in the top right of the screen.
2. Next, click on the Investment Models tab, on the left side.
3. Click on “Add New Investment Model”

Adding a new investment model will allow you to view that model in the portfolio analysis tool, or use it when comparing portfolios.

How to create an Advisor Investment Model?

Creating an Advisor Investment Model is similar to adding a portfolio in the portfolio analysis section.

1. Name your portfolio and add your holdings using one of 3 options

 

 Adding tickers one at a time

If you only have one or two tickers to enter, you can manually search for the security by entering the ticker or typing the security name. 

In the portfolio creation modal, enter a security ticker, and then choose from the search results.

 

When adding a security to a portfolio, you can choose between entering the number of shares or the dollar value of the position.  If you enter number of shares are used, then the amount will be calculated using the price of the security from the last day of the previous month.

 Uploading the CSV template

 If you have a big list of tickers, you can download a csv file right here [show link] and populate the ticker and the shares OR amount , upload the file and inStream will determine the value.

Download the CSV template at the bottom of the portfolio creation modal.

We suggest that as you collect account statements, to transfer that data into a csv template.  The template itself is very simple, with only three columns: Ticker, Shares, and Amount.

 

Enter your data into a csv for easier uploading.

 

When entering data into a CSV template, here’s a few pointers to keep in mind:

 

1. Each row with data must have a ticker symbol
2. If shares are left blank, please be sure to enter an amount
3. If amount is left blank, please be sure to enter number of shares
4. If values are entered for both shares and amounts, the csv uploader will use the number of shares
5. Data may be formatted as a dollar amount, or as a number.
6. No matter how many decimals are entered, the CSV uploader will round to the 1000^th decimal point.

 

Logic is applied to the CSV template to improve user experience. Please see the pointers above.

Once your csv is ready, be sure to save it for easy access, and then upload the file by clicking on the Blue Upload button in the portfolio creation modal.

 

Pasting securities to create a portfolio

 

The third method, allows you to copy and paste your data.  After you’ve compiled holdings data into the csv template, you can literally copy and paste that data into the inStream portfolio creation modal.  This is great if you’re throwing together a handful of securities, but even if you have a portfolio of 100 securities, this will still work.

 

Using exactly the same csv upload template, simply enter in your data. 

 

When copying the data, there are a few pointers to keep in mind.

 

1. Ignore the headers when copying your data
2. If using amounts, please be sure to copy the blank shares column
3. If using number of shares, it is not necessary to copy a blank amount column.

 

When copying data, please be aware of the pointers above.

 4. Once your are done adding securities remember to click SAVE.

What if Morningstar doesn’t recognize my security?

 If Morningstar doesn’t have data on a security, you can enter the ticker and click add, then  you can type in the name, choose an appropriate asset class, and apply the number of units and value. This is a useful for individual bonds and any security where we are not getting historical data.

What if I don’t agree with Morningstar’s asset classification?

Even if we do have data for a security, you might still disagree with Morningstar’s asset class categorization, and this is where you can make a change.  We have 56 asset classes available and you just select the appropriate asset class for that security.  This is also where you can edit the units or the total value of the position.  Keep in mind that we use pricing data as of the end of the last month, and that gets updated around the 5^th day of each month.

 Once the data is pasted, you can revise the allocations or change the asset class categorization.

Upon saving the advisor investment model, the portfolio will then be available to be used in portfolio comparisons, and also in plans.