Principia Research Mode Online Basics Training Manual

Principia Research Mode Online Basics Training Manual Welcome to Principia Research Mode Basics Course, designed to give you an overview of Principia's Research Mode capabilities. The goal of this guide is to help you better manage how you research, so you spend less time working in Principia and more time with your clients. In today s online session, you will learn the basics on how to find and compare securities, create searches, customize your screen using layouts, and finally, we ll look at creating customized graphs. Overview This manual covers the following topics for Research Mode: Orientation to the Interface Finding and comparing funds Generating Reports Creating Searches Creating Graphs What is covered in this manual? Version 1.0 1

Overview Orientation to the Interface Orientation to the Interface In this section, you will learn about the different parts of the Principia interface. Specifically, you ll learn about the following areas: Menu Bar Toolbar, and Spreadsheet area. Overview Menu bar Toolbars Spreadsheet area You will learn about different items available from the Principia menu bar throughout this class. For now, note the following about the menu bar in Principia: Many, but not all, of the functions you can use from the File, Edit and View menus can be accessed from the toolbar icons. Additionally, the options under these menus also show you the toolbar icon to click in order to use that particular tool. Some of the menu options include a hotkey shortcut, for users who prefer to use their keyboard instead of their mouse. A reference for these is provided on page page 26. The menu bar in Research mode 2 Version 1.0

Orientation to the Interface What do all of the icons on the toolbar do? The table below identifies each icon available to you on the Principia toolbars. This icon is called And is used to What do all of the icons on the toolbar do? New create a new Research file, or portfolio for a client. Open retrieve saved Research files. Save save search results and layouts. Print Search Layout Rank by Stock or Bond print Fund Detail pages or the Current View report for selected securities access the Search Dialog box. You can enter criteria to narrow down the universe to find securities that meet your investment criteria. access the Layout Dialog box, which customizes the Research View to display only the data points you are interested in seeing. find all funds that invest in a particular stock or bond. Find quickly find a security in Research mode. Find a Field scroll to a specific data field in Research mode. Select All highlight current investments in Research mode. Highlighted securities can be printed, graphed, averaged, or exported Average create an arithmetic average of selected securities. Graph access the Graph Dialog box. Complete Fund Holdings view the portfolio for a selected security. Help access definitions and learn about program functionality. Version 1.0 3

What do all of the icons on the toolbar do? Orientation to the Interface This icon is called And is used to Morningstar Page generate a report for a mutual fund with Morningstar Analyst commentary; this report exists for approximately 1,700 funds. Research Mode switch to Research Mode. Portfolio Mode switch to Portfolio Mode. Advisor Palette hide/show the Advisor Palette 4 Version 1.0

Orientation to the Interface Other items of note on the Principia screen In addition to the menu bar and the toolbar icons, a couple of other items are important to take note of on the Principia screen. On the lower toolbar are two drop-down fields. The first is known as the Current View list. From here, you can switch the data universe you are looking at. For instance, you can switch from looking at Mutual Funds to seeing Stocks or Closed-End Funds, depending on which universes you subscribe to. Other items of note on the Principia screen Select an option from the Current View list to see different investment types in the spreadsheet area. Note two other items about how data is displayed in Research mode: You can see only one data universe at a time. That is, you cannot see both Stocks and Mutual Funds at once; it is one or the other. The Mutual Funds universe contains not only open-end funds, but also Exchange- Traded Funds, a number of indexes and category averages as well. Version 1.0 5

Overview Investment Lists and the Fund Detail Page Investment Lists and the Fund Detail Page In this section, you will learn the following: How to find a security by name, ticker, family name or manager name (rather than finding investments with the Search dialog box) How to create investment lists, and What are the key data points on the Fund Detail page. Overview You can use the Find a Fund icon to locate a security by one of the following: Fund Name Family Name Manager Name, or Ticker. Using the Find a Fund feature You can also use the Find a Fund tool to create a list of your favorite securities. Note that the Find a Fund feature searches against only those items you have showing in the Research view. Therefore, if you have recently run a search by criteria or used the Quickscreen drop-down field to filter out some items, you might need to click the New icon to reset the universe and show all rows. As you create your list by selecting items from the Find a fund dialog box, monitor the status bar at the bottom of the screen; it tracks of the number of investments you have selected. 6 Version 1.0

Investment Lists and the Fund Detail Page Using the Find a Fund feature In this exercise, you will use the Find a Fund feature to create an investment list composed of the securities and benchmarks. Exercise 1 Principia has three types of benchmarks: Indexes (abbreviated Idx:), Categories Averages (abbreviated Cat:), and Objective Averages. (abbreviated Obj:). Do the following: 1. Click the New icon to refresh the Research View. The New dialog box appears. The option for Mutual Fund Research File should be selected. 2. Click OK. This resets the universe, and returns all rows and data columns to the Research View. 3. From the toolbar, click the Find a Fund icon. The Find a fund dialog box appears. 4. Type Alger SmallCap Growth A. Note that as you type a name, the system automatically scrolls to that location. 5. Double-click Alger SmallCap Growth A. The Find a fund dialog box closes, and the status bar at the bottom of the Principia window now says 1 Item selected. 6. Repeat steps 3-5 to find and select the following four additional items: AIM Small Cap Growth A Columbia Acorn USA A IDX: Russell 2000 Growth TR CAT: Small Growth If you accidentally select a wrong item, you can deselect it from the Research View by holding down the CTRL key, and clicking on the name of the security. 7. Click the Fund Detail icon on the toolbar, to view the Fund Detail pages for the selected items. 8. Use the up and down arrows in the bottom left corner of the Fund Detail page to toggle through selected holdings. Click the arrows to scroll between funds. Version 1.0 7

Overview Generating Reports Generating Reports Principia allows you to view and print several reports, including the following: Fund Detail (the PDF version is FINRA reviewed for client use) Fund vs. Fund (a comparison report) Overview This section will show you how to generate these reports. In this exercise, you will print a fund detail report with FINRA disclosure material. Do the following: 1. Click once on the name of any investment to highlight it. 2. From the toolbar, click the Print icon. The Print dialog box appears. 3. In the Print dialog box, select the option button for Detail. 4. Under the Print Options area, select the option button for Print FINRA Disclosure Material. Exercise 2 Select both of these options to print the client-approved version of the Fund Detail report. 5. Click OK to print the report. 8 Version 1.0

Generating Reports Overview In this exercise, you ll see an alternative method for viewing the Fund Detail PDF report with FINRA-review material. Do the following: 1. Click once on the name of any investment to highlight it. 2. From the menu bar, select View PDF Fund Detail. The report opens with the compliance material automatically included. Exercise 3 Select this option from the View menu. In this exercise, you ll select two funds, then use the Fund vs. Fund Comparison report to compare data on the two funds. Do the following: 1. Click once on the name of any investment to highlight it. 2. Hold down the CTRL key on your keyboard and click a second investment. 3. From the menu bar, select View Fund vs. Fund (PDF). Exercise 4 Version 1.0 9

Overview Getting Started with Research Getting Started with Research Select this option from the View menu. Research Mode is essentially a spreadsheet of data. Principia covers tens of thousands of securities (rows) and several hundred fields of data (columns). This section shows you how to manipulate both which rows of data you see, and what columns of data appear in the spreadsheet area. You can use several techniques to find items in the spreadsheet, or review a set of rows with certain columns. For example, you can: find a single fund create a search to find multiple funds, or customize your screen to display only the fields of data you want to see. Overview Search allows you to narrow the database and find securities that meet your needs. A search can be created using any of the 200-plus data fields in Principia. The Search dialog box prompts you to select the Relationships, Fields, Conditions, and Values that make up your search criteria. By default, data points, or Fields, are organized into five main categories with several dozen sub-categories. Double-click any category or sub-category in bold text to see the actual field of data. Searching for a group of securities 10 Version 1.0

Getting Started with Research Searching for a group of securities Category Sub-category Data field Click Alphabetical to view data fields in alphabetical order. Version 1.0 11

Searching for a group of securities Getting Started with Research In this exercise, you ll create a Search to find Large Value funds with an overall Morningstar Rating of five stars. Additionally, you ll see only one share class for each of these five-star Large Value funds. Do the following: 1. Click the Search icon on the toolbar. The Search dialog box appears. 2. Create a search with the following criteria and settings: Exercise 5 Line Rel(ationship) Field Operator Value 1 ----- Morningstar Category = Large Value 2 And Mstar Rating = QQQQQ 3 And Special Criteria = Distinct Portfolios only (C) Hint: Double-click an item in the Search dialog box to select it. Also, the Mstar Rating field is under the Performance - Morningstar Ratings subcategory. 3. Click the Search button on the dialog box to see how many funds meet your criteria. Distinct Portfolios only (C) finds only the oldest share class for funds with multiple share classes available. 4. Click OK to return to Research View to see the results. How many funds met your search criteria? 12 Version 1.0

Getting Started with Research Altering which columns appear in the spreadsheet area In this section, you will learn about the data columns that appear in the spreadsheet area. By default, the Research View displays all available data points. The Layout dialog box (shown below) allows you to customize the Research View to display only the data points of interest to you. Altering which columns appear in the spreadsheet area Items in the Display area appear in the Research View. The Layout dialog box has two main areas, each described in the table below: Area Fields Display Description The Fields area contains all of the data columns you can select. They are organized into six main categories and multiple subcategories. (The same grouping you see in the Search dialog box.) You can also elect to see all of the fields listed in alphabetical order The Display area reflects the columns of data being shown in the spreadsheet area. This is where you will set the data points you want to include. Version 1.0 13

Ranking the database by a particular column Getting Started with Research In this exercise, you will customize the Research View by creating a Layout of a selection of data fields. Do the following: 1. Click the Layout icon. The Layout dialog box appears. 2. From the center of the dialog box, click Remove All. This clears all data fields from the Display area. 3. Create a layout by double-clicking these data points in the Fields area: Morningstar Advisor.com Web Reports Morningstar Category Equity Style Box Tot Ret Annlzd 3 Yr Tot Ret Annlzd 5 Yr Tot Ret Annlzd 10 Yr Exercise 6 Hint: You can select the option button for Alphabetical (under the Layout area) to sort all data columns by name, rather than category. Further, you can then click in the Layout area and type the name of the field you are looking for, to jump to that spot in the list of columns. 4. Click OK to return to the Research View. You can sort the Research View by any data column. Just double-click the column header, and the universe falls into descending order. Double-click again to rank in ascending order. Ranking the database by a particular column In this exercise, you will rank the spreadsheet area to see which fund had the highest 3-year return. Then, you will rank again to see which fund had the lowest 3-year return. Do the following: 1. Double-click the Tot Ret Annlzd 3yr column header to sort the data in descending order. 2. Double-click the Tot Ret Annlzd 3yr column again to switch to ascending order. Exercise 7 Hint: Right-click a column header to quickly add a new field (via the Layout dialog box), instantly remove a field, or to access the Help directory. Right-click a column s header to see the options available here. Which fund has the highest Total Return Annualized for 3 Years? Which fund has the lowest Total Return Annualized for 3 Years? 14 Version 1.0

Saving, Printing and Exporting in the Research View Overview Saving, Printing and Exporting in the Research View Now that you have created a search and layout, the Research View displays only the funds and data columns of interest to you. In this section, you will learn how to do the following: Save your work Print the Research View, and Export data to an Excel spreadsheet. Overview After conducting a search and creating a layout, you might want to save the results for use at another time. In this exercise, you will learn how to save and retrieve your current search and layout. Do the following: 1. Click the Save icon on the toolbar. The Save As dialog box appears. 2. In the File Name field, type Large Value. Note the file type (.msv) and location for the file being saved. 3. Click Save to close the Save As dialog box. Saving a Search by criteria for later use Enter a name for the search, then click Save. Version 1.0 15

Saving a Search by criteria for later use Saving, Printing and Exporting in the Research View 4. Click the New icon on the toolbar. The New dialog box appears. 5. Make sure the option button for Mutual Fund Research File is selected, then click OK to return to the full database of funds and data fields in the Research View. Select this option, then click OK. 6. Click the Open icon on the toolbar. The Open dialog box appears. 7. Select Large Value, then click Open. Principia retrieves the Large Value search, as well as the customized layout. WIth each Principia update, all research files are automatically updated, so you might not see the same investments you did when you first saved the file. Select the name of the file you want, then click Open. 16 Version 1.0

Saving, Printing and Exporting in the Research View Printing the Current View Printing the Current View allows you to print the rows and data columns appearing in the Research View. This report is not FINRA reviewed for client use, but can be useful for conducting research outside of Principia. Before you do this, you must highlight which rows you want to print. Also, before printing the Current View, create a layout (or select a saved layout) that, when printed, will fit on a standard sheet of paper oriented to Landscape. Printing the Current View In this exercise, you will learn how to print the results from the Large Value search. Do the following: 1. To highlight all rows in the spreadsheet, click the Select All icon on the toolbar. 2. Click the Print icon on the toolbar. The Print dialog box appears. 3. On the Print dialog box, select the option button for Current View. 4. From the Orientation area on the dialog box, select Landscape. Exercise 8 Be sure to select this option Select Landscape when printing the Current View. 5. Click OK to print. Version 1.0 17

Exporting the Current View Saving, Printing and Exporting in the Research View The Export function allows you to extract data from Principia into an Excel spreadsheet. Once exported to Excel, the data remains static and is not updated with future releases of Principia. Exporting the Current View All data columns currently displayed in Research View will be exported to Excel. If you do not want to export certain fields, use the Layout dialog box to customize which columns will appear in Excel. In this exercise, you will learn how to export the Large Value search into an Excel spreadsheet. Do the following: 1. To highlight all rows in the spreadsheet, click the Select All icon on the toolbar. 2. From the menu bar, select File Export to Excel. Excel opens automatically and the data appears. You will need to save this file for future use. Exercise 9 After highlighting the rows to be exported the data automatically appears in Excel. 3. 18 Version 1.0

Working with Graphs and Other Topics Overview Working with Graphs and Other Topics Graphs are a great way to illustrate data to a client. Research Mode has the following eight graphs: Overview Growth of $10,000 Rolling Period Return Risk/Reward Scatterplot Growth of $10,000 Stacked Bar Total Annual Return Standard Deviation Correlation Matrix Return vs. Category Quartiles. You can print, save and use the Clip button to copy and paste a graph from Principia into Windows applications such as PowerPoint or Word. This section covers two of the more popular graphs, as well as how to see a fund s underlying holdings, and how to rank funds based on their underlying holdings. The Growth of $10,000 graph illustrates the performance of up to five items. When selecting just one fund, the S&P 500 TR appears as a default benchmark, as well as the fund s Morningstar Category average. When working with this graph, you can do the following: manipulate the time period being covered select different investments to appear add or change a benchmark, and change the colors being used on the graph. Working with the Growth of $10,000 graph Version 1.0 19

Working with the Growth of $10,000 graph Working with Graphs and Other Topics In this exercise, you ll create a Growth of $10,000 graph, change the benchmark, and edit the time period being displayed on the graph. Do the following: 1. Click the New icon to refresh the Research View. The New dialog box appears. The option for Mutual Fund Research File should be selected. 2. Click OK. This resets the universe, and returns all rows and data columns to the Research View. 3. Click the Find a Fund icon on the toolbar. 4. Select Columbia Acorn A. 5. From the toolbar, click the Graph icon. The Graph Selection dialog box appears. 6. From the Graph Selection dialog box, select Growth of $10,000, then OK. The graph appears in a new window. Exercise 10 Make sure this item is selected before clicking OK. 7. Click the Edit button at the bottom of the screen. The Growth of $10,000 dialog box appears. Click the Edit button. 20 Version 1.0

Working with Graphs and Other Topics Working with the Growth of $10,000 graph 8. Click the Source drop-down arrow and select Indexes. A list of indexes appears. Select this option from the Source field. 9. Find Russell Mid Cap Growth TR. Then, drag and drop it into the third line, replacing the S&P 500 TR. Be sure not to drop the Russell Mid Cap Growth TR into any other field! Note where to drag and drop the new index for the graph. 10. At the bottom of the dialog box, adjust the Beginning Time Period to 01-01-2001. Do not change the Ending Time Period. 11. Click OK. The graph now reflects the Growth of $10,000 from 01-01-2001 through the most recent month end in Principia, and includes a different benchmark. What is the Annualized Return % for the fund in this time period? Version 1.0 21

Working with the Growth of $10,000 graph Working with Graphs and Other Topics Principia includes the complete stock and bond holdings for most investments in the following universes: Mutual Fund Variable Annuity/Life Closed-End Fund, and Separate Accounts. You could use the Complete Fund Holdings tool, for example, to see exactly what is held in the Dodge & Cox Stock fund, or Growth Fund of America. This can help eliminate redundancies and duplication in a portfolio. In this exercise, you will learn how to view the portfolio for Fidelity Low-Priced Stock fund. Do the following: 1. Click the New icon to refresh the Research View. The New dialog box appears. The option for Mutual Fund Research File should be selected. 2. Click OK. This resets the universe, and returns all rows and data columns to the Research View. 3. Click the Find a Fund icon. 4. Select Fidelity Low-Priced Stk. 5. Click the Complete Fund Holdings icon. The spreadsheet view changes to show you the holdings of the fund. Exercise 11 From the menu bar, select File Return to go back to the Research View. You can also click this icon to return to the Research View. Which security does Fidelity Low-Priced Stock own the most of, based on % of Net Assets? 22 Version 1.0

Working with Graphs and Other Topics Using the Rank by Stock or Bond feature The Rank by Stock or Bond feature allows you to see mutual funds that own a particular security. By first selecting the funds in a client s portfolio (so that only they show in the Research View), this tool can also help reduce equity duplication in a portfolio. Using the Rank by Stock or Bond feature In this exercise, you will learn how to view investments that own a particular stock. Do the following: 1. Click the Rank by Stock or Bond icon. The Rank by Stock or Bond dialog box appears. 2. In the Holdings Listed: field, type PepsiCo. Exercise 12 Be sure this box is checked. 3. Click OK. You are returned to the Research View, and the columns are sorted based on the funds position in PepsiCo. Ranked by Percent Net Assets, which fund has the largest exposure to PepsiCo? Version 1.0 23

Overview Appendix I Principia Search Tips Appendix I Principia Search Tips The following sections contain a number of tips to assist you when conducting searches in Principia. Overview The Distinct portfolios only (C) option allows you to identify the oldest share class of a fund (with multiple share classes). Alternatively, you could look for a specific share class, such as Share Class Type = A. Finding Distinct Portfolios Note: The (C) in the field name Distinct portfolios only (C) does not refer to C shares. Although Exchange-Traded Funds (ETFs) are not traditional mutual funds, the Principia Open-End database provides information on ETFs. Use the Special Criteria option to create a list of all ETFs. How to find Exchange- Traded Funds You can find True No-Load Funds by using the Special Criteria option. How to find True No- Load Funds Percentile Rank refers to a fund s percent rank within its Morningstar Category. The best percentile (most favorable) is 1 and the worst (least favorable) is 100. Funds with the best returns in a category will always receive a rank of 1. Finding a fund based on its Percentile Rank 24 Version 1.0

Appendix II Other Tips and Tricks Overview Appendix II Other Tips and Tricks This section covers some additional tips about using Principia. Overview Principia s Help explains program functionality and data point definitions. Data point definitions include detailed equations for all relevant fields. For instance to find the definition for Sharpe Ratio, do the following: 1. Click the Help icon. The Help window appears. Finding answers in the online Help Resize the Help window as needed to make it more readable. 2. Select the Index tab. 3. Type Sharpe Ratio. 4. Double-click Sharpe Ratio. The definition appears in the right-hand panel. Enter the term you want to search for, double-click its name from the list, then read its definition in the right-hand panel. Definitions can also be accessed by right-clicking any column header in the spreadsheet area. Right-click on the column header, and from the menu that appears, select Help. The definition for the column header will display automatically. Version 1.0 25

Hotkey shortcuts in Research Mode Appendix II Other Tips and Tricks Shortcuts to program functions can be completed by pressing hotkeys on your keyboard. Review the table below for hotkeys available in Principia. Hotkey shortcuts in Research Mode This hotkey Does the following F1 Activates the Help menu. F2 Generates an Average for highlighted securities. F3 Generates the Fund Detail for the selected security. F4 Activates the Graph Dialog box. F5 Generates the Morningstar Page PDF F6 Opens the Search Dialog box F7 Opens the Layout dialog F8 Opens the Find a Fund dialog box F9 Selects or deselects all securities in the Research View Ctrl+Click Shift+Click Allows you to select multiple non-consecutive securities. Allows you to select multiple consecutive securities. 26 Version 1.0