New Monevator readers often ask what’s the best way to track and manage their portfolios.
Old hands may rock a custom spreadsheet. One that’s probably more sophisticated than the software aboard an Apollo spacecraft.
However I’d happily recommend Morningstar’s Portfolio Manager. It’s a free online portfolio tracking tool that does the important things well.
All you have to do is input your trades.
You can also assess your progress against an index, and ever-popular time-frames, such as the last ten years, year-to-date – or even yesterday.
The tool comes courtesy of Morningstar – the financial data powerhouse. It’s number-crunching is widely white-labelled1, including by a number of UK platforms.
Portfolio tracking features
Let’s run through the main features of Portfolio Manager. (You can see Monevator’s Slow & Steady portfolio in the pics below).
Behold the at-a-glance overview screen! Here you’ll find your investments’ price, market value, number of shares, and asset allocation percentage.
This snapshot lets you maintain a unified view of your investments. Especially handy if they’re diversified across multiple brokers.
Now check out the ‘Add a Transaction to This Portfolio’ zone towards the bottom. Woah!
This is where you fill in your latest trades from your contract notes.
The portfolio tracking tool then automatically updates your portfolio in line with your market machinations.
This is my favourite screen. (Okay, I don’t get out much, pandemic or no.)
With the Performance tab, you can watch your portfolio race your benchmark on the graph at the top.
Here we see the bond-heavy Slow & Steady portfolio (green line) is lagging the FTSE All-Share (blue line) this year.
The same Tron Light Cycle battle plays out in numbers in the Trailing Returns section.
Total Return is your portfolio’s time-weighted, unitised annual performance. The Investor likes this metric. (So does the fund industry.)
Personal Return is your portfolio’s money-weighted, annualised performance. It’s also known as the Geometric Return or Compound Annual Growth Rate (CAGR). This is what I care about.
The Holding section shows the time-weighted return contribution of the individual investments you currently own. It’s fascinating to see how strategic asset allocation decisions have played out over the years.
Some expectations are confirmed, such as equities beating bonds.
Other predictions have been confounded. Like, for instance, prior calls for a decade of poor returns for US equities. (The US market was the driving force behind the stellar results of the Vanguard FTSE Developed World and Global Small Cap funds).
Note, Morningstar’s returns are nominal. Subtract average inflation to get your real2 returns.
The Gain/Loss tab shows you the contribution made by every investment you’ve ever held. It’s quite the trip down memory lane. Especially if your past is strewn with ten-baggers and questionable buys you regret like kipper ties.
Sometimes I check Morningstar’s Price to Earnings Forward guidance (P/E Forward) to see which investments look good value. Lower numbers are better, in theory. But I don’t really trust this metric.
UK equities looks relatively cheap. If nothing else, that makes me feel less queasy about rebalancing into the FTSE All-Share.
You can input your trades, review every change back to the year dot, record dividends, split shares, and set up regular purchases.
I’ve skipped past functionality I don’t use, such as email alerts. I’ve also ignored the extended play you unlock with a Morningstar subscription.
The freemium model gives you five portfolios gratis. That’s great if you’re managing multiple allocations on behalf of family members, or you’re juggling different investing objectives.
(You could use a slot to peer into a parallel universe where you didn’t sell that golden ticket. Although that way madness lies.)
Staring at the screenshots, scornful of the shabby interface?
Congratulations, you’ve spotted one of Portfolio Manager’s best features.
This tool is not mobile-optimised. Indeed Morningstar hasn’t made a single UX improvement in over a decade.
It’s not compelling, it’s not addictive, and I don’t want to sneak a peek every ten minutes…
…and such old school clunkiness is an advantage when Silicon Valley is using every psychological trick in the book to bend my attention towards its fruit machines.
Portfolio Manager harks back to a more utilitarian Internet age. An era when tools did one thing well enough, and not every app let you order pizza and ethereum.
Anyway, I’ve used Portfolio Manager for well over ten years. I’ve never regretted it. My manual spreadsheet now gathers dust.
Take it steady,
That is sold to and rebranded by third-parties.