Do you find keeping track of your mutual funds troublesome? How do we know which individual stocks and/or bonds we are holding with our funds? Are we concentrating too much in too little?
One of the tools that can help us to answer the above questions is Morningstar Portfolio Manager.
What is Morningstar?
First, a little bit about the company that provides this useful tool.
From Investopedia,
“Morningstar is a Chicago-based investment research firm that compiles and analyzes fund, stock and general market data. They also provide an extensive line of internet, software and print-based products for individual investors, financial advisors and institutional clients. The research reaches all corners of the world, including North America, Europe, Australia, and Asia. Among its many offerings, Morningstar’s comprehensive, one-page mutual and exchange-traded fund (ETF) reports are widely used by investors to determine the investment quality of the more than 2,000 funds.
(Investopedia Definition Link)”
You can roughly know its prominence if it earns an entry in the definition list of Investopedia. In short, it is a company that offers investment research.
Fund portfolio monitor
Morningstar Portfolio Manager (Link) is a free tool that allows us to easily update, track and analyse investment portfolio of mutual funds. Since we are using Morningstar Malaysia, this tool only tracks mutual funds available in our country. Though it covers a large number of funds, not all funds are available. Nonetheless, I think the fund selection is quite wide and only a few funds are not available.
After registration, you will need to activate the account from your email. Once you have logged in, click the “Create Portfolio” button and give it a name. After that, search for your fund in the “Tickers Search” box. A new window with a list of funds will pop up. You just have to tick your fund and click the “Add to Portfolio” button at the bottom of this page. After you have added a fund, it will appear in the original window. You have to click the pencil icon to edit the number of units on hand, the purchase price and purchase date. The purchase date can be left as default but the other two fields must be filled.
You can use the search box on top of the pop-up window to perform new searches now. Continue to add all your funds. Once you are done, click the “X-Ray this Portfolio” button in the original window.
Instant X-Ray
A new window will pop up. This function analyses all your funds in one go.
The default page is the overview. You can make changes in two fields – view and benchmark. A benchmark is selected automatically but you can change it if you want. Just select from the “Select a Benchmark” dropdown list.
In the overview page, you will see information on Asset Allocation, Investment Style, Stock Sectors, World Regions, Stock Stats, Bond Stats, Top 10 Holdings and Top 10 Underlying Holdings. For those headings with the words “Holding Details” beside them, you can click on it to get a clearer picture. Let’s go through them sequentially.
Asset Allocation
The portfolio is classified into Stocks, Bonds, Cash, Other and Not classified. In this section you will see your total exposure to the different asset classes. The exposure of every fund will also be given if you go to its “Holding Details” page.
Investment Style
This section classifies your portfolio based on the invested stock characteristics including its market capitalization size. In its “Holding Details” page, the style of each fund is displayed.
Stock Sectors
Your portfolio is classified into Cyclical, Sensitive, Defensive or Not Classified sectors. You can find the breakdown of each fund in its “Holding Details” page.
World Regions
This shows the regions where your funds invest in. You can see the breakdown of each fund in its “Holding Details” page.
Stock Stats
This section specifies the Price/Earnings Ratio, Price/Cashflow Ratio and Price/Book Ratio for the equity portion of your portfolio. Its “Holding Details” page provides information for every fund with equities in your portfolio.
Bond Stats
This part shows the Effective Maturity, Average Credit Quality and Modified Duration for the bond part of your portfolio. But this part might show nothing if there is no information available regarding the bonds in your funds. Its “Holding Details” page provides the breakdown of every fund with bonds in your portfolio, if available.
Top 10 Holdings and Top 10 Underlying Holdings
As their names suggest, these two sections list down the top 10 mutual funds you are holding and the top 10 bonds and/or equities that you hold in your portfolio.
Others
If you look at the drop-down list from the “Select a view” box, you will find two views that are not covered above. They are Bond Style and Performance.
Bond Style classifies the bonds according to their maturity in your portfolio. In this page, you will also see the breakdown of each bond-holding fund in your portfolio. Nonetheless, this page might show you nothing if the information is not available.
Performance shows the returns of your portfolio according to duration. This tool also analyses the returns of each of your fund.
Conclusion
What do you think about this fund portfolio monitor? Although it is not really complete, I still think that it is a great tool. The most important thing is that it is free. So what are you waiting for? Just go to the site (Link) and register to use it.
