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Tracking your portfolio the easy way

Not tracking your portfolio results is like using a fairground mirror to fool yourself into believing you’re thinner than you really are. It makes it easier to distort reality and pretend that everything is hunky-dory. No indisputable facts, no reason to dispel the fairy story.

I prefer reality to make-believe. But tracking your portfolio on a spreadsheet is laborious and every other method seems to be flawed in one way or another.

So I’ve outsourced the whole job to financial data provider, Morningstar.

Its free Portfolio Manager tool does the heavy lifting – tracking the rise and fall of your assets as faithfully as the tides track the moon.

Below you can see what Morningstar’s portfolio tracker looks like – in this case tracking Monevator’s model passive portfolio.

Quite the looker, ain’t it?

Portfolio tracker - snapshot screen

This Snapshot shows your holdings arrayed on the left, followed by market prices and overall market value. Your current asset allocation is covered off by % weight.

However the more powerful screens lie on the right of the menu bar…

Performance

Portfolio tracker - performance

This section speaks truth with the directness of a toddler. There’s a lot going on but it’s the annualised return numbers (circled) that I’m really interested in.

These are the numbers that will ultimately determine the fate of my plan. The retirement calculators tell me I need 4% real return per year. I can take the annualised figure given here and subtract inflation, taxes and platform fees to discover my real return.

The good news is that fund fees are already accounted for.

Gain / Loss

Portfolio tracker - gain / loss

This is the place for truth-seekers who want a warts ‘n’ all picture rendered in pounds and pence.

Every holding you’ve ever owned is archived here with the losses memorialised in red. At the bottom (off screen here) you can see exactly how much you’ve made or lost, in raw £s, since year dot.

Fundamental

Portfolio tracker - fundamental

The Fundamental screen helps you to diversify and to check that nothing loony tunes is happening with valuations.

The style boxes (circled in red) are Morningstar shorthand for the make up of your holdings.

The equity boxes show the average size of your securities and whether they’re tilted towards firms with value or growth characteristics.

The little selection of security squares we have here shows that Monevator’s Slow & Steady passive portfolio is concentrated in large cap equities. The blend designation means that our fund’s holdings tilt neither towards value nor growth.

Ideally we’d diversify into some funds with a small cap value bias but there aren’t any suitable candidates available for our purposes.

The bond style box reveals the credit quality and interest rate sensitivity of our holdings. You can find a fuller explanation in this Morningstar guide.

The P/E Forward column is our canary in the coalmine when it comes to stock market value.

The forward price to earnings (P/E) ratio offered by Morningstar is a guesstimate based on historical projections and analysts’ reports.

It’s a flawed measure but it’s the easiest way for small investors to get some handle on valuations at the fund level:

  • Developed world stock market P/E ratios below 15 or so probably indicate that equities are on the cheap side. We can be optimistic about expected returns in these conditions.
  • P/E ratios above 20 indicate assets are possibly over-valued and so expected returns have a good chance of being miserable in the future.

P/E ratios have been found to explain only about 40% of future returns, so this is a dicey game to play at best, but you can be more confident about buying when P/E ratios are low.

Time to make tracks

You can track up to five portfolios for free and the portfolio manager can alert you to an equity / bond allocation that needs rebalancing, if you tell it to.

Trustnet have a similar tool which I used for a while but eventually abandoned in favour of Morningstar.

New investors with only a few holdings may get by with the portfolio tracker provided by their broker, but I’d recommend using Morningstar as well:

  • It’s a good idea to have an independent record of your holdings.
  • Morningstar’s tools are more powerful than most brokers’.
  • One day you’ll probably want to diversify among brokers. Morningstar’s portfolio tracker will offer an invaluable unified account of your treasure, whereas retrospectively recreating years of trades will be an insurmountable ache in the sacks.

A portfolio tracker is an invaluable record of your progress, and with the Morningstar version all you need do is keep it abreast of your trades.

The hard part is resisting looking at it all the goddamn time.

Take it steady,

The Accumulator

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{ 35 comments… add one }
  • 1 Willem de Leeuw May 13, 2014, 10:16 am

    Does it take account of interest, dividends and any other type of distribution in its P&L calculations? I’ve found that these sorts of tools will often do so for stocks (though often with incorrect FX rates for non-base currency dividends) but won’t for unit trusts, or if it does it will be hit and miss e.g., the FT’s portfolio tool.

  • 2 Under The Money Tree May 13, 2014, 10:16 am

    The Morningstar tool looks like a good option. That said I currently use the FT portfolio feature as my quick checker and still maintain month end valuations in Excel as my ‘official books and records’.

    As you mentioned I’ve found all of the online trackers have their limitations so the flexibility of xls is attractive. Also I link in the portfolio valuations in to another xls that tracks my net worth and income as well as a forecasting spreadsheet I’m working on 😉

  • 3 ermine May 13, 2014, 10:22 am

    Thank you for this elegantly simple summary. I use a spreadsheet and Quicken but it’s getting more complex as the years roll by. I don’t normally do cloud anything but this might be the exception, and testing the various cloud apps is hard work with a stock portfolio of any size.

    Of course you’re still always at the hazard of the provider deciding to charge you and/or pulling features you like, but that’s goes with the patch I guess!

  • 4 helfordpirate May 13, 2014, 10:29 am

    The big advantage of using Excel for a “fiddler” like me is that you can divert any urge to mess with your portfolio (a likely wealth destroying activity!) into safer tasks such as getting the XIRR function to work properly or changing the colours on your graphs…

  • 5 Snowman May 13, 2014, 10:43 am

    I’ve been using the Morningstar portfolio tool for a while and would recommend it.

    You can use it as a portfolio tool or as a way of getting your own fund prices (useful where you have funds/ETFs on different platforms).

    I have my own excel spreadsheet also and copy the prices from the Morningstar portfolio into that, so get the best of both worlds. For example hold the control key down and then click down the current price column on the individual prices one at a time to select. Choose copy and then paste into an excel workbook and you have your column of prices in your own spreadsheet. Very quick to do.

  • 6 John Kingham May 13, 2014, 12:00 pm

    I’ve played around with the Morningstar tool but as a stock picker I wasn’t won over. It’s more focused on funds, which is fair enough as that’s Morningstar’s thing. For direct share holdings I tend to stick with ShareScope.

    Also, for passive investing I think that if you can’t track it on paper or in a simple spreadsheet once a year then you’re probably overcomplicating things, multiple broker accounts or not.

  • 7 roconnor May 13, 2014, 12:23 pm

    It can sometimes be difficult to find funds as there are so many of them.
    I was looking for a particular Aviva fund that I hold,and I simply can’t find it.

  • 8 dlp6666 May 13, 2014, 12:28 pm

    I’m wondering what it was about the Trustnet tool that you felt didn’t match what Morningstar has to offer, as I’ve just transferred a small ISA holding to Trustnet Direct and I think the underlying tools – for both live and virtual portfolios – are those provided by Trustnet.

  • 9 Neil May 13, 2014, 1:31 pm

    Would be nice if there was an easy way to import transaction history instead of typing it all in 🙁

  • 10 Hamzah May 13, 2014, 2:15 pm

    Not sure about regularly tracking a portfolio by this method as it induces in me the desire to be reactive. However accessing the X-ray tool, for example for a basket of investment trusts (no need to register), is invaluable in understanding overall composition and overlaps when initially planning the portfolio strategy. I think one can do that for funds as well if registered, so I’d probably use Morningstar for such specific goals rather than set up a running portfolio.

    Despite being fairly open on discussion boards about the value of parts of my wealth, I still retain a reticence to pool all that information with a third-party internet site. Spreadsheets can be clunky, but as suggested give scope for development of skills if one wishes to add a few bells and whistles. More usefully they make one think about what actually are necessary readouts when setting up the spreadsheet.

  • 11 Lee May 13, 2014, 2:35 pm

    I’m a consistent user of the MS portfolio and do appreciate it.

    Over the past few months they have also started sending out a PDF file which summarises all your holdings, including a correlation analysis, a short one paragraph summary of each holding, as well as some projections for where your portfolio could be in the future. I like this, but have been meaning to sit down for months to work out actually how they are working out these projections. Overall, the PDF allows me to keep track of how things are changing and progressing as well keep a record of things (I’m far too passive, or perhaps, lazy for inputting things into excel regularly).

    Sometimes it can be a bit fiddly – if you input the wrong price or the wrong number of shares it can take a while to work through the changes. The website is also a bit slow sometimes.

    Other than that, it’s a worthwhile service and their research analyses have already paid for their services many times over.

  • 12 Toby May 13, 2014, 2:38 pm

    IS there a way for it to take into account automatic purchasing of more units of funds you already have in your portfolio?

    Ideally wnat soemthing like this, but one that I dont have to go in and tell it ive brought another £500 qorth of this or that a month, when its the same purchase that gets made every month.

    Thanks!

  • 13 dearieme May 13, 2014, 3:58 pm

    For an actual portfolio, of perhaps around eight different assets, I intend to look once per annum, rebalance, and leave it at that. I think a sheet of paper might do pretty well.

    But for pretend portfolios these things must be super, so for my own education I might dive in.

  • 14 vanguardfan May 13, 2014, 4:03 pm

    I have to say I’m in the camp who say that the easier it is to monitor your ‘performance’, the greater the risk of indulging in performance destroying behavioural biases…
    In fact I’d go so far as to say I’d love to be able to turn off my online brokers’ automatic display of losses and gains. I’ve noticed I’m much less likely to worry about the account where I simply can’t tell whether the individual funds have gained or lost!
    I simply try and add up everything (not too often) to see what the bottom line is. Not quite sure what I will do with that information investing wise though, as the whole point is not to react or change asset allocation on the basis of market information…

  • 15 Geo May 13, 2014, 4:47 pm

    Wow, looking at this you could spend some serious time inputting historical data. Over the years, buying and selling and slowly getting into and learning about passive investing, I’ve always wondered over the last 5+ years of this what my actual annualised performance was. I can guess some figures on a piece of paper, but if a i get some time i might have to see how much effort it is to really see. Or just forget it, tune out and enjoy the sun and the growth on my allotment.

  • 16 The Accumulator May 13, 2014, 7:17 pm

    @ Willem – yes it can handle divis.

    @ Helford – that made me laugh. Yes, I’m the same. Idle hands are the devil’s workshop!

    @ Roconner – ask Aviva for the ISIN number and put that into Morningstar.

    @ dlp – I would put my preference for Morningstar down to personal preference. They were quite similar really, but I was more comfortable with the Morningstar version. Trustnet has good tools all the same.

    @ Hamzah – yes, I did find the X-Ray tool useful but these days you have to pay for it and then I swiftly decided I didn’t find it that useful.

    @ Lee – what’s the charge for MS Portfolio?

    @ the very lazy investors 😉 I salute all who don’t track on the basis that they’ve made their peace with a passive investing strategy and don’t want to be distracted. I have set times of the year at which I review everything and that seems to be enough to quench my curiosity the rest of the time. Although I must admit I find it hard not to peek when adding a new investment.

    I have never considered not tracking, mostly because it’s so easy to fool oneself otherwise. Perhaps that doesn’t apply so much to true passive investors who have decided to accept their fate. Nonetheless, it’s been very educational to watch the wax and wane of various asset classes. It’s like being able to watch the moving parts of your portfolio and it does drive home the value of a diversified asset allocation and the futility of market timing.

    I also like having a second opinion on the valuations my broker gives me.

  • 17 Alex May 13, 2014, 8:56 pm

    Thanks for the post. So far I have been using FT but am considering to change to MS now (not too much work, as I am fairly new to all of this here =).

    On a related note, I wondered whether anyone knowns about a good online tool/website which allows to optimise a given portfolio allocation (i.e. Markowitz suffices, no need for Black-Litterman or Fama-French-like factor models). So far haven’t found something useful and free. I’m a little reluctant to move to XLS or R. Anyone else an idea?

  • 18 Jeff May 13, 2014, 9:31 pm

    I use a google spreadsheet.
    I have 2 ISA accounts, 1 SIPP account & 3 other trading accounts, therefore a spreadsheet is the best way of both knowing where my money is AND having an instant total.
    If I could find a reliable way of automatically downloading web prices to Excel, I would use Excel instead.

  • 19 mistersquirrel May 13, 2014, 10:18 pm

    Ah, but isn’t there a danger in getting too much distracted by the micro? Charts, dashboards, and stats are terribly, *terribly* alluring to those of us who have a slightly geeky side.
    Shouldn’t we just buy an index-tracker and glance at it with affection once a year?

  • 20 neverland May 13, 2014, 10:50 pm

    I’ve been using the Morningstar tool for a couple of years but I don’t think its actually that good

    Quite a lot of investment trusts/funds just aren’t covered when you look at the Xray

  • 21 Andy May 14, 2014, 12:00 am

    I have several spreadsheets in Google Docs. One tracks my net worth over time, updated twice a year. One contains current values for my portfolio which I can then view as pivot tables to see different views, e.g. asset allocation or totals per account etc.

    I also use Google Finance as it gives a quick view of my portfolio which can also be accessed on my phone, although it is annoying that I have to update both the Google Docs spreadsheet and the Google Finance portfolio. Unfortunately with both Google Docs and Google Finance there are some problems with some funds being missing or not reporting in the correct units and currencies. However it is possible to correct anything in the spreadsheet and manually enter values if needed.

  • 22 Lee May 14, 2014, 6:38 am

    >@ Lee – what’s the charge for MS Portfolio?

    19 pounds per month.

  • 23 Dave May 14, 2014, 8:53 am

    I’ve recently started using the Beiley Fund Manager Software. It’s a pretty steep learning curve for a while, but I went with it from Morningstar for a number of reasons.

    1) I just kept checking MS too often! And I liked the idea of having all my information locally
    3) I can set target allocations for my asset classes – helping with rebalancing
    4) It helps with minimising capital gains – in that you can specify which ‘lots’ to sell (and you can minimise/maximise loses automatically)
    5) I can specify the benchmark index to measure the performance of each of the funds I am using – although I’ve not got into this too much yet

    There are a whole host of other reports and graphs it can do, but I only use the basics.

  • 24 nibbler May 14, 2014, 11:19 am

    Having tried both, for me Morningstar portfolio wins over Trustnet just for ease of use.

    But I’m unsure what ‘Personal Return’ on the Performance screen refers to. Anyone enlighten me?

  • 25 nibbler May 14, 2014, 12:21 pm

    To answer my own question :

    “What is the difference between total return and personal return?
    For each transactional portfolio, within the Performance section you can find two types of returns, personal and total. Total return tells you how much your portfolio has increased or decreased in value over a given period. Personal return, by contrast, takes into account the timing of buy and sell transactions. Comparing your portfolio’s total return and personal return can give you a good idea of how effectively you have timed sales and purchases. If you haven’t made any transactions, the two returns will be the same.”

  • 26 lumino May 14, 2014, 1:43 pm

    Hmm… doesn’t seem to recognize retail bonds, which for me makes it fairly useless, unless I’m missing something…

  • 27 bob May 17, 2014, 10:07 am

    I’ve been using morningstar (free version) for around a year and find it generally very good. There are a couple of things which I find frustrating:

    There only appears to be the option to trend trailing returns for 12 months. A comparable trend for longer time periods would be helpful

    After trying to backfill 8 years worth of trades, I’m consistently finding that it no longer recognises firms which have delisted or have been bought out meaning I can’t enter the trades hence profit/loss associated with them. Given takeovers account for a significant amount of profit over this time period, my overall returns appear lower than in fact they are.
    I know the profit from my broker records so even having the ability to enter a profit amount with the date realised would be helpful.

    If anyone has found an answer to either of the above, or if it’s user error on my part, I’d appreciated any information.

  • 28 Andrew Knox May 17, 2014, 9:14 pm

    Phew. Nearly 4 years of data just added – that was a slog!

    One question though: The Vodafone / Verizon deal – any tips on how to deal with that scenario? I’ve updated the split section (where 6 new shares replaced 11 existing) but I’m not sure on how to deal with the cash inflow I got. Also, I fudged the buy price of the Verizon shares to close to zero – was that the right way to go?

  • 29 Grand May 18, 2014, 1:03 am

    I do enjoy looking at the waxing and wanes of my growing portfolio which is pretty much thanks to all the sterling efforts of the monevator content writers and the guys/girls who comment on a regular basis. I like to use Trust net to give me an overview of my performance/asset allocation. I like how it breaks down the holdings I have by industry and regional allocation which enables me to see just how diversified I actually am. I the free portfolio management tool on Morning Star doesn’t provide this analyses which I find vital.

  • 30 MrsFinancialFreedom May 19, 2014, 1:09 pm

    Thanks for the recommendation as I have been looking for a way to track my funds.

    I’m with Charles Stanley Direct and even though their customer service is good, I’m not too keen on the layout of their website especially for tracking your funds performance.

    I will definitely give morningstar a try.

  • 31 gilesm July 23, 2014, 4:01 pm

    Hello, after 2 months are you still finding it work well? I use a large xls to manage my holdings, but it’s taking up more and more of my time, despite using neat things like smf_addin to automatically update prices. Tracking divis or splits is painful. Is it as painful as £159 p.a. though?

    I’m considering ShareScope/Morningstar/as-is – an interesting mix of comments here.

  • 32 Halle Åberg March 6, 2017, 7:03 am

    I would recommend AlphaTrackr (www.alphatrackr.com). It’s simple and totally free.

  • 33 Steve March 20, 2017, 6:19 pm

    Are there any newcomers that are worth looking at rather than Morningstar? I’d like an overall analysis of a mixed bag of funds, etfs, shares etc currently spread over a variety of platforms, ISAs , pensions etc. I’d like some nice clear graphical summaries of overall allocation, performance, comparion with benchmarks etc that only seem to be available to premium users of MS. It’s going to take a lot of effort to enter all the individual funds and locate original purchase dates, prices etc (and track changes of fund name over the years) so any recommendations greatly appreciated.

  • 34 Mr Bean October 15, 2017, 4:22 am

    I’ve just tried using Morningstar’s tracker tool but it doesn’t save any details I enter into it, can someone tell me whether it’s still working for them please?

    I’ve emailed Morningstar as well and am waiting for a reply. Would appreciate any help!

  • 35 The Accumulator October 18, 2017, 5:57 pm

    Sounds like a glitch. I had a similar problem myself lately. I found it was peculiar to my laptop though. When I logged in with a different laptop it was absolutely fine. Morningstar will get back to you and talk you through a few things you can try.

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