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Duration: 9:38

Instructor:

Contributor: Interactive Brokers

Level: Beginner

PortfolioAnalyst has a vast amount of number-crunching capabilities for the user to customize. We begin this course by jumping into a sampling of potential report views available within PortfolioAnalyst and describe some of the charts and data tables a user may configure.

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Study Notes:

Use PortfolioAnalyst to evaluate the performance of your portfolio by creating and saving reports based
on a set of measurement criteria and optionally comparing their data to selected industry benchmarks.
If you have an account at IB, you can view your account’s performance as well as that of investment and
non-investment accounts held at other financial institutions. You may then drill down to see accounts,
asset classes, positions and transactions.

Our reporting tool enables users to create snapshot and detailed reports and to drill down in to
investment portfolios. The Portfolio Analyst is highly configurable and allows the user to customize the
time period under review and automatically breakdown a portfolio into asset class, geographic region
and by symbol for both long and short investments. Performance display is plotted graphically in your
reports with investments conveniently grouped and performance compared against common
benchmarks or even an index of your own construction.

This lesson aims to show you some of the reporting capabilities that users may create with Portfolio
Analyst. In later lessons we will go into detail on how to configure the reporting tool, how to create
reports and even how to add your external accounts to include in the Portfolio Analyst. Here’s a tour of
several of the pages that may be selected for inclusion when a user creates a detailed custom report.
Account Overview – The Account Overview displays Key Statistics displaying starting and ending Net
Asset Value and computes the cumulative return for the period chosen by the user. It also calculates the
latest 5-and-10-day returns and pinpoints by date, the high and low water marks for the account. Finally,
it also shows a net value for deposits and withdrawals for the selected period.

The Cumulative Return plot is drawn directly above the Net Asset Value, and uses the beginning balance
as its starting point. Changes in NAV are calculated as percentage differences for each period and
displayed in the line chart. Declines in NAV cause a drop in returns while rising NAV boosts returns.
Ending Asset Allocation is a snapshot of portfolio composition by asset class at the end of the period
under review. The pie chart display is color-coded to depict stocks, options, futures, futures options,
funds, warrants, cash or other asset types. Values and percentage values are also displayed above the
charts. Short positions are displayed separately from long positions.

Open Position Summary – The Open Position Summary also shows long and short positions in the form
of pie charts, but this time identifies the top five positions in each direction and groups the remaining
positions under the label of ‘Other’. Below the display, all portfolio positions are broken out by Asset
Class and according to currency. The table shows Symbol, Quantity and position direction, Value in the
currency of the asset as well as in the account’s base currency. Unrealized P&L is also displayed along
with the Cost Basis for each asset.

Allocation by Asset Class – Your portfolio NAV is displayed in histogram form and according to asset
class at the end of each period using the Allocation by Asset Class report. Short positions are displayed
with negative values below the zero dollar line.

Allocation by Sector – Equity positions can be broken down according to basic economic sectors within
the Allocation by Sector report. Each end-period value is displayed in the accompanying table to include
a Total column to the right. Positions are assigned positive values for longs and negative values for
shorts in stack histogram fashion.

Allocation by Region – *Equity* positions are broken out by Region for long and short, and according to
the top five concentration also for long and short in the Allocation by Region report. The display is in pie
chart form with descriptive weighting tables beneath.

Time Period Benchmark Comparison – The performance of equity positions in a portfolio may be
displayed against benchmarks of your choice using the Time Period Benchmark Comparison Report. In
this case the display plots the daily performance of each selected index in bar chart form, along with the
performance of the user’s account. This enables the user to easily compare relative performance for each period with respect to comparable commonly used benchmarks.

Cumulative Benchmark Comparison – The cumulative performance line chart simply adds the
performance of each selected benchmark for each period across the chosen time horizon. Once again
this enables the user to visually compare the volatility of their investments versus the chosen
benchmarks over time.

Risk Measures – The current risk of your portfolio can be displayed in a line chart and text summary. The
line chart plots a Value-Added Monthly Index (VAMI) over the specified time period. VAMI is an index
that tracks the monthly performance of your portfolio based on a hypothetical initial $1000 investment.
The text summary shows a variety of risk measures, including Max Drawdown, Peak-to-Valley
Drawdown, Recover, Sharpe Ratio, Sortino Ratio, Calmar Ratio, Standard Deviation, Downside Deviation,
Mean Return, Positive Periods and Negative Periods.

In addition, this report includes a Distribution of Returns bar chart showing the range of return
percentage for each day, month or quarter in the specified time period and the number of times the
return performance fell within that range for the entire period.

Performance Attribution – The Performance Attribution table is broken into two parts.
The upper table shows how your portfolio is allocated among ten different sectors, and how that
allocation compares to the S&P 500 Index. The table has three parts showing the beginning, ending and
average weight for each sector in your portfolio and the S&P 500, and the difference (positive or
negative) between the two, represented by a percentage. You can use this table to see how under or
overweighted your portfolio is in each sector compared to the S&P 500.

The lower table lets you compare your returns in each of the ten sectors, plus cash and unclassified, to
those of the S&P 500, and view the attribution effects of your sector allocation and stock selection
within each sector. Attribution effects let you see why your returns in a particular sector were better or worse than those of the S&P 500.

The Period Return part of the table shows the absolute return percentage for each sector in your
portfolio and for the S&P 500, and the difference (positive or negative) between the two.
The Contribution to Return part of the table measures the contribution of each sector to the overall
return. The table also illustrates the contribution of return for the account of each sector versus the S&P
500.

Contribution and Attribution effects are displayed graphically below the tables to breakout performance
between Allocation and Selection within your portfolio. In the quadrant below, the display illustrates
weight and performance by sector.

Performance by Symbol – The top and bottom five performers by ticker are displayed in the
Performance by Symbol report using a histogram. The portfolio is further sliced to display the
contributions by sector and contribution by asset class.

There are several other types of reports that Portfolio Analyst users may choose from in order to build
periodic performance metrics. These include heat maps allowing users to view a color-coded array of
their holdings from best to worst with the display also viewable according to sector and the component
weighting. You can also compare your portfolio’s performance versus any popular benchmark or
construct a benchmark of your own. Estimated net cash flows across stocks, funds, fixed income and
short stock positions are displayed in the Projected Income report to aid investors consider portfolio
yield.

Disclosure: Interactive Brokers

The analysis in this material is provided for information only and is not and should not be construed as an offer to sell or the solicitation of an offer to buy any security. To the extent that this material discusses general market activity, industry or sector trends or other broad-based economic or political conditions, it should not be construed as research or investment advice. To the extent that it includes references to specific securities, commodities, currencies, or other instruments, those references do not constitute a recommendation by IBKR to buy, sell or hold such investments. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.

Supporting documentation for any claims and statistical information will be provided upon request.

Any stock, options or futures symbols displayed are for illustrative purposes only and are not intended to portray recommendations.

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