Morningstar Adviser Workstation Release 3.11 New Features Guide 1
Contents Client Reporting... 3 Web Portal... 3 Client Overview... 3 Activating the Client Overview... 3 Snapshot report... 4 Integration... 7 Transact Online... 7 Using the Transact Online Import... 7 Charting... 8 Income Analysis... 8 Income v No Income... 9 Dividend bar chart... 9 Rolling Yield Chart:... 10 Technical Analysis... 11 Price Chart Moving averages... 11 Holdings Similarity Chart... 12 Similarity Score... 12 Common Holdings Score... 13 Active Share Score... 14 Portfolio Analysis... 14 Efficient Frontier Chart... 14 Client Portfolios... 16 Positions with History accounts... 16 Creating a Positions with history account... 16 Editing a Positions with History account Creating a new portfolio date... 17 Editing a Positions with History account - Editing an existing portfolio date... 19 Importing data into Position with History Accounts... 20 Model Portfolios... 22 Variable models... 22 Creating a new Variable Model... 22 Editing a Variable Model Creating a new portfolio date... 23 Editing a Variable Model - Editing an existing model date... 24 Importing data into Variable Models... 26 2
Client Reporting Web Portal A new view has been enabled for the Client Web Portal Client Overview The overview provides an aggregated summary of all a clients accounts. Activating the Client Overview In the Settings section on the Home Tab click on the Client Web Portal Settings option To activate the Overview tab click on the Overview Settings tab and select Enable Aggregate Component Selection on Web Portal Once this is activated you will be able to select up to 6 components that represent the aggregate holdings of the client The options are: Portfolios: A list of all the client s accounts and their Market Value Asset Allocation: The aggregated asset breakdown of a the client s holdings Net Worth (Asset Comparison): A breakdown of assets by tax status Net Worth Summary: An overview of a clients assets and liabilities Investment World Region Breakdown: An interactive map of where the client s assets are invested Top 5 Holdings: The top 5 holdings by market value and the % of the clients total assets they represent. 3
You can select each element via the dropdowns on the page and determine the date you want the data to be updated to at the bottom of the page. Selecting preview will launch the client web portal so you can view the changes you made. Snapshot report In response to feedback from a number of users, we have introduced the ability to edit the contents of the report. 4
There are 7 elements that you can choose from Portfolio Analysis: The stock and bond holding characteristics of the portfolio Stock Analysis and Performance: Detailed holdings breakdown and Performance figures Top 10 Holdings: Risk Analysis: Risk/Return Scatter Chart and Performance +/- Benchmark Chart Risk and MPT stats: A selection of Risk and Modern Portfolio Theory Statistics Fundamental Analysis: Detailed Stock and Bond holding information 5
Holding Return Table: Performance table of the Portfolios holdings 6
Integration Transact Online We have established a seamless integration with Transact. This will enable users to pull their client positions directly from Transact to their Adviser Workstation Import Blotter To be able to use this service you will need to register Morningstar as a data provider with Transact by filling out a Transact A04 form. Using the Transact Online Import Open the Import application: Double click on the Transact Online (TOL) option Enter your Transact Access Code and PIN and Click OK Your data will then be pulled back to the Morningstar Import blotter where it can be reviewed before posting 7
Charting Income Analysis The income analysis charts can be accessed via charts menus in Research, Workspace, Model and Portfolio Summary views. Either via the action button for multiple funds Or by via the right click on an individual fund 8
Income v No Income This chart demonstrates the effect on performance of reinvesting dividends It compares the Total Return against the Price Return. Dividend bar chart This is a simple bar chart of the dividends paid out by a fund in a calendar year. It enables you to analyse the consistency of dividend payments over time 9
If you select the 1 year or 6 month time period, you can get a picture of the timings of those dividend payments to assist in creating a portfolio that has a regular income stream Rolling Yield Chart: This chart shows the rolling 12 month yield. It enables you to analyse the consistency of fund yields. 10
Technical Analysis Price Chart Moving averages Simple and Exponential moving average options have been added to the price chart 11
Holdings Similarity Chart The Holdings similarity chart provides 3 ways to compare the holdings of a group of funds. The holdings similarity chart can be accessed via the Charts menu under the action button To select which chart you require click on the Chart setting option in the chart Similarity Score For this calculation setting, we find the common holdings for the two investments. Then we determine the percent each common holding represents in the two investments separately. We then sum these percentages within each investment and divide by the percent of assets considered in the comparison (based on the Compare setting following). 12
For example, if Fund 1 and Fund 2 have three holdings in common, we can list the proportion the holdings represent in each portfolio. Fund 1 Compare Stocks: stocks represent 90% of portfolio holdings Holding A 2% Holding B 3% Holding C 5% Fund 2 Compare Stocks: stocks represent 50% of portfolio holdings Holding A 3% Holding B 4% Holding C 1% In this example, the common holdings A, B, and C represent 10% of Fund 1 (2%+3%+5%). Dividing by 90%, we find the similarity figure for Fund 1: 11%. This percentage is displayed in the row corresponding to Fund 1 versus the column for Fund 2. The common holdings represent 8% of Fund 2. Dividing by 50%, the similarity figure for this portfolio is 16%. This percentage is displayed in the row corresponding to Fund 2 versus the column for Fund 1. In other words, considering the stock holdings of Fund 1, 11% are held in common with Fund 2. Considering the stock holdings of Fund 2, 16% are held in common with Fund 1. Common Holdings Score For this calculation setting, we find the common holdings for the two investments. Then we determine the percent each common holding represents in the two investments separately. We discern which is the lesser percentage and then sum these lesser percentages. For example, if Fund 1 and Fund 2 have three holdings in common, we can list the proportion the holdings represent in each portfolio. Fund 1 Holding A 2% Holding B 3% Holding C 5% Fund 2 Holding A 3% Holding B 4% Holding C 1% In this example, Holding A represents 2% of Fund 1 and 3% of Fund 2. For the calculation, we use 2% to represent the common holding % of Holding A. Likewise, we take 3% for Holding B and 1% for Holding C. Summing these percentages, the common holdings score for these portfolios is 6%. Using this calculation setting creates a symmetrical matrix. In our example, 0.06 is displayed in both the row for Fund 1 versus the column for Fund 2 and in the row for Fund 2 versus the column for Fund 1. 13
Active Share Score Active Share is a measure identified by Yale Professors Martijn Cremers and Antti Patajisto in a their research report How active is your Fund Manager (2009) Active share allows users to gauge how active fund managers are applying their stock picking skills by comparing the composition of the fund portfolio to the composition of their benchmark index or a similar passive investment. It is calculated by as follows (1- Common holdings score) The nearer a score is to 1 the more the fund portfolio differs from those you are comparing it to. Portfolio Analysis Efficient Frontier Chart You can now access the Portfolio Efficient Frontier Chart outside of the Planning Module. This will enable you to quickly analyse a clients current holdings and compare them to any of your models From the tools menu select the Efficient Frontier Option Select the client you want to work with 14
This will then load an interactive efficient frontier chart 15
Positions with History accounts Client Portfolios Positions with History accounts allow you to track the changes in the composition of a clients portfolio over time without the need to record the transaction details of the portfolio. Creating a Positions with history account Either from the Client view or the Portfolio management view, select the new portfolio option Select Positions with History 16
Give the portfolio a name and click next The fund holdings and weights or number of units and click Finish Editing a Positions with History account Creating a new portfolio date From the Holdings Summary view select Edit and New Portfolio 17
Set the relevant date and decide whether to start with a blank page or whether to clone an existing position as a starting point If you select to clone an existing position (Modify Constituents from an Existing Portfolio), you choose the position by selecting the date Selecting Retain Shares will populate the new portfolio date with the holdings of the source portfolio. 18
Selecting Retain Weights will also pull through the weights of funds in the source portfolio Edit the holdings in the holdings entry screen and click Finish Editing a Positions with History account - Editing an existing portfolio date If you wish to edit the composition of an existing portfolio date, From the holdings summary select the Edit button and choose Edit Portfolio 19
Select the date you wish to edit and click OK Edit the holdings in the holdings entry screen and click Finish Importing data into Position with History Accounts You can use platform data to populate Position with History accounts From the main toolbar, select the import option 20
Double click on the Custodian & Accounting Templates Positions With History Browse for the position file you want to use, select the relevant template and click OK If the file that you are using doesn t have an As Of date, the system will add the portfolio using today s date. There is an option to use a Morningstar generic excel template which is laid out in the following format 21
Model Portfolios Variable models The functionality that existed under Position Accounts in the last release has now been moved to the Variable Models option in Workspace. Any data you entered under Position Accounts will now appear under Variable Models The workflow for creating and maintaining Variable Models is the same as for Position Accounts, however you can now assign the model to a client account and rebalance that account to the latest instance of your variable model. Creating a new Variable Model From within Workspace, click on Variable Models and select new from within the Models toolbar. Give the model a Name and set the Currency, Rebalancing Frequency, Performance Calculation Method etc. 22
Set the appropriate date, Select your holdings and weights and click finish Editing a Variable Model Creating a new portfolio date From the Holdings Summary view select Edit and New Portfolio Set the relevant date and decide whether to start with a blank page or whether to clone an existing model position as a starting point 23
If you select to clone an existing position (Modify Constituents from an Existing Portfolio), you choose the position by selecting the date Selecting Retain Shares will populate the new portfolio date with the holdings of the source portfolio. Selecting Retain Weights will also pull through the weights of funds in the source portfolio Edit the holdings in the holdings entry screen and click Finish Editing a Variable Model - Editing an existing model date 24
If you wish to edit the composition of an existing portfolio date, From the holdings summary select the Edit button and choose Edit Portfolio Select the date you want to edit and click OK Modify the holdings and click Finish 25
Importing data into Variable Models You can bulk load historic model positions from an excel spread sheet Click on the Import button in the main tool bar Select Morningstar Variable Models Holdings Select the excel sheet that contains your data and map the data fields and click OK A sample of how an import spreadsheet might look is below 26