Most Advisors get confused with the way to present Portfolio Statement to their clients. How & what detail should be shared? Read along to get clarity on reporting formats, formulae, limitations and present client's portfolio in a clear way to make client's life much easier.

2. Showcasing Client Portfolio
By : Sunil Jain, Founder, InvestWell

3. Agenda
1. Portfolio performance - how to showcase
2. Understand the various methods of showing portfolio returns
3. Understand the Math behind it
4. When to use which return

4. Components of a Portfolio Statement
Ideal Portfolio statement should have multiple segments, with option to select segments to include.
1. Summary snapshot
2. Holding analysis
3. Portfolio performance
4. Recommendation

5. Components : Snapshot
This summary should include all Cash Flows from the Investors account.
Provides a one glance health check

6. Components : Allocation Analysis
Current Assets allocation. It should include all assets held with the Investor.
● By Asset Class
● By AMC
● By Scheme
● By Family Member
● By Industry Sector / Rating
● By Scrip / Instrument

7. Components : Allocation Analysis

8. Components : Allocation Analysis

9. Portfolio Rebalancing

10. Components : Portfolio Performance
● Held Portfolio (as on a date)
● Portfolio by Goals (as on date)
● Redeemed Portfolio (as on a date)
● Complete Portfolio
○ Since Inception till date
○ For a specified Period
○ Year on Year

11. Sample Transactions
Date Scheme Type NAV Unit Amount
01/04/2018 Mirae Purchase 10 1000 10,000
30/06/2018 Mirae Div Pay 500
01/04/2019 Mirae Redemption 11 100 1,100

12. Held Portfolio
Date Scheme Type Pur.
NAV
Units Current
NAV as
on
31/7/2019
Dividend
(Rs)
Gain
(Rs)
Absolute
Return (%)
CAGR
(%)
01/04/2016 Mirae Purchase 10 900 13 450 900*
(13-10)
+ 450
=Gain/
(900*10)
?

13. CAGR (Compounded Annualized Growth Rate)
Final Value = Initial Value (1+CAGR/100)N/365
(N is No of days held)
CAGR = 100 * ( Final Value/Initial Value )(365/N)
In this example CAGR = 100* ( 12150 / 9000)(365/487)
As per best practices, Returns for Investments held for less than 1 year should be simple annualized.
Simple Annualized Return = Absolute Return * 365 / Days of Holding

14. Redeemed Portfolio
Sell Date Scheme Type Sell NAV Units Pur Nav Dividend
(Rs)
Gain
(Rs)
Absolute
Return (%)
CAGR
(%)
01/04/2019 Mirae Purchase 12 100 10 50 100*
(12-10)
+ 50
=250
=Gain/
(100*10)
….

15. Total Portfolio Return
Start Date Scheme Purchase
Amount
Sell
Amount
Market
Value
Dividend
Pay Out
Realized
Gain
(Rs)
Unrealized
Gain
(Rs)
Absolute
Return (%)
XIRR
(%)
01/04/2016 Mirae 10000 1100 11700 500 = 700
100*
(12-10)
+ 500
= 2700
900*
(13-10)
= 34%
3400*100/
10000
Total Gain
*100 /
(10000)
?

16. XIRR(Extended internal rate of return)
XIRR is a measure of Return used when multiple investments are made in a scheme,
at IRREGULAR TIME periods.
There is No Direct formula for XIRR.
It is calculated in an Iterative method. MS Excel does provide a formula, but internally it does an iteration only.
XIRR Considers all Cash Inflows and Outflows. Gives Total Return %

17. YoY XIRR Portfolio Return
Opening
Balance
1/Apr
Purchase Redemption Div
Payout
Closing
Value
31/Mar
XIRR
2014-15 0 100 0 0 110 10%
2015-16 110 500 100 0 900 12%
2016-17 900 0 200 0 800 8%

18. Portfolio - by Goals

19. Which Report to use ?
When discussing only the current portfolio and way forward
Held Portfolio Report -
Goal Based Portfolio Report - When focus is on Client Goals and Status
Unrealized Capital Gain - When Planning a Redemption

21. Which Report to use ?
Redeemed Portfolio - When discussing the actual booked profit
Redeemed Portfolio with Notional Gain as if not Redeemed
Total Portfolio Return - When discussing the Portfolio Performance and Advisor Value Add
YoY XIRR Report

22. Benchmark Return
Each Scheme has a Benchmark which is used to compare its performance
Portfolio returns must be compared with the specific benchmark to indicate outperformance.
The Overall Portfolio Return can then be compared with the Blended Benchmark return.

23. Investor Returns Vs Scheme Return
Why is the Investor return different from Scheme return ?
AMC factsheets provide Trailing Returns and Calendar Year Returns
Client portfolio return will be different from that provided in the scheme factsheets.

24. Investor Journey (Shows Increase in Net Worth)

25. Personalize your Reports
Personalize your Communication
● Include Market Commentary / Update
● Add Recommendations
● Introduce new Services/Staff

26. Summary
● Use Held Units Reports to Discuss Current Portfolio and Way Forward
● Goal Wise Portfolio Report is a better option
● Total Portfolio Returns to be used when discussing Performance.
● Demonstrate Increase in Net Worth of the Client.
● Personalize your Communication

27. Thank You
Feedback and Suggestions are welcome.
Please email at jains@investwellonline.com