Creating and Assigning Targets

Transcription

1 Creating and Assigning Targets Targets are a powerful reporting tool in PortfolioCenter that allow you to mix index returns for several indexes, based on the portfolio s asset class allocation. For example, if your client s portfolio contains 30% equity, 50% fixed income and 20% mutual funds; you might not want to compare the portfolio s entire return to an equity index alone. Instead, you might want to mix indexes and take 30% of an equity index, 50% of a bond index and 20% of a mutual fund index to get a better idea of how the portfolio actually performed, as compared to the market. This document shows you how to create targets and then assign them to portfolios so you can see the result on performance reports. Creating a Target When creating a target, there are a few things to keep in mind: Number of Clients do you have the same investment policy for several clients, or is each customized? Do you want to display this information for all clients? The number of targets you create depends on the number of clients who want this information and the resources you have in setting up and maintaining the targets. You can use the same target for multiple portfolios, as long as the investment policies (or asset class allocations) make sense. Indexes do you have all your indexes defined and/or updated? Since the target is a blend of indexes, you must have indexes defined and updated with returns. See Importing Index Data from Investment View for more information about updating index returns. Asset classes all targets are based on asset classes, so you must have asset classes defined (in categories) and assigned to all assets in the portfolio. Dates the date ranges entered for the target determine the frequency at which the target is rebalanced and these should be updated each time you rebalance the portfolio. You can have different returns than expected if you do not rebalance the target s returns regularly. The table below shows the difference in a return calculation for a quarter when you rebalance the target monthly, as compared to the return for the same period without the assets being rebalanced. Both examples use the same indexes with the same weighting throughout. For more information, examples and steps for maintaining the Target, see Using and Maintaining Your Targets. Date Range Index 1: 60% Index 2: 40% Target Return Overall index return (A) Weighted index Return (B) Overall index return (C) Weighted index Return (D) Add Weighted returns (B + D) 12/31/08 1/31/ % % 5.00 % 2.00 % % 1/31/08 2/28/ % 6.00 % 7.00 % 2.80 % 8.80 % 2/28/09 3/31/ % 9.00 % 6.00 % 2.40 % % Return for the quarter, monthly weighted: 35.99% Quarterly Return: 48.01% % % 7.64 % % DocumentID: spt Last Updated: January 19, 2011

2 Follow the steps on the next pages to create a new target, and then assign it to the appropriate portfolios. 1 In the main window, click the Models tab to switch to the Models page. 2 Click the Targets button on the left. 3 Click the New button to go to the Target Details window. 4 Enter the name and title of the target. The title of the target appears on reports. 5 Click the New button on the far left, under the Date Ranges field, to create a new date range. If the investment policy remains constant over time, you can leave the dates blank. If the investment policy changes over time, enter a Begin and End date. 6 Click the New button on the right, under the New Date Range field, to enter a new asset class. 7 Click the browse button to the right of the blank field in the Asset Class column to select the asset class from a list. You can also press <F4> to select the asset class from a list. 8 In the % Total column, enter the weight of the selected asset class in the portfolio. 9 In the Index column, click the browse box, or press <F4>, to select the index you want to compare to the return of the selected asset class. 10 Repeat steps 6 9 until the % Total column is equal to 100%. 11 If you have selected a date range in Step 5, click the New button on the left, under date ranges, and enter the new date range. Repeat steps 6 9 for that date range. Tip If you have multiple time periods with the same asset classes that just change weight over time, use the Copy button under the date range section to copy the asset class names, and then change the allocations over time. Be sure to change the dates, though, because you cannot save the target with overlapping or similar date ranges. 12 Click the Save button to save the target. 13 When you return to the models window, press<f5> to show the new target on the list. Creating and Assigning Targets Page 2 of 5

3 Assigning a Target Before you can use the target on a report, you must assign them to portfolios. You have five options to assign a target: In the Target Assignments Table (available through the Models tab), the Portfolio Data Manager, globally modify portfolios, set portfolio defaults, or the portfolio details. Using the Target Assignments Table This method provides you with a table of all the portfolios and groups and allows you to assign the target to each portfolio individually, while seeing assignments for all the portfolios and groups at once. This method is ideal if you: Are setting it up for the first time Have to change several assignments at once, but not to the same page. Follow these steps to assign a target using the Target Assignments Table: 1 In the main window, click the Models tab. 2 Click the Targets button on the left. 3 Click the Go To Assignments button at the bottom. 4 Click the browse button in the Target column for the portfolio to which you are assigning the target. 5 Select the target to assign, and then click OK. 6 Repeat for each portfolio for which you are assigning targets. 7 Click the Save button to save the assignments. Creating and Assigning Targets Page 3 of 5

4 Using the Portfolio Data Manager This method provides you with a table of all the portfolios and groups meeting the requirements of the selected view and helps you assign Targets to several portfolios and/or groups at once. This method is ideal if you: Are setting it up for the first time Have to assign the same target to several portfolios Note To effectively use this method, you should set up an appropriate view to include the Target column. For more information about creating the view, see Creating Views Using the Portfolio Data Manager. If you already have a view and you want to edit it to include the Target column, see Editing PortfolioCenter Views. Follow these steps to assign a target using the Portfolio Data Manager: 1 From the main portfolios page, click the Data Manager button to open the PortfolioCenter Data Manager. 2 Select the appropriate view to see details of the portfolios 3 In the Target column, select the appropriate target for the first portfolio. 4 Copy the contents of the field and then paste it into the other cells for other portfolios as necessary. 5 Run the View again to save the changes and post the data back into the portfolios. Using Portfolio Defaults This method lets you assign a target to all new portfolios automatically. This method is ideal if you: Are adding a new portfolio and want the setting to be updated automatically Will assign the same target to all future portfolios Follow these steps to assign a target using Portfolio Details: 1 If necessary, click the Portfolios tab to switch to the portfolios page of the main window. 2 From the menu bar, select Setting Portfolio Defaults 3 Click the down arrow to the right of the Target setting and select the target you want. 4 Click OK to save the changes. Creating and Assigning Targets Page 4 of 5

5 Using Portfolio Details This method lets you assign a target to one portfolio or group at a time. This method is ideal if you: Are adding a new portfolio and are updating the settings just before you post Have to update one or two portfolios or groups Follow these steps to assign a target using Portfolio Details: 1 If necessary, click the Portfolios tab to switch to the portfolios page of the main window. 2 Right-click on the portfolio you want to update, and then select Go To Details. You can also select the portfolio, and then click the Go to Details button at the bottom of the window. 3 In the portfolio details, click the Settings tab. 4 Click the browse box to the right of the Target field, and then select the target from a list. You can also click in that field and press F4 to select the target from a list. 5 Click the Save button to save the changes. 6 If you have more changes to make, press F2 and select the next portfolio or group from a list. Repeat steps 4 and 5 for each additional portfolio. Creating and Assigning Targets Page 5 of 5