YCharts now lets you screen mutual funds— making it suddenly relevant to mainstream advisor practices.

1. July 2015 Inside Information
A
year ago, I wrote that
I had been using a
new online tool called
YCharts (www.ycharts.com),
which seemed to fit somewhere
between the ultra-costly
Bloomberg terminal and the
more limited Yahoo! Finance
website. At the time, it was
limited to screening individual
stocks, but other datasets
provided a very useful way to to
.sdnertcimonocefopotnoyats
You can use YCharts to track
and graph industrial production,
labor statistics, changes in one
currency’s value relative to
other currencies, scan the GDP
numbers for a wide variety of
countries, compare household
price indices, track commodities
and bond rates, housing starts
and oil prices, inflation and
expenditures.
The screening capabilities
for individual stocks, blended
with these various economic
indicators and a lot of balance
sheet data, plus the ability
to throw everything up onto
comparison graphs and charts,
Portfolio Management
Plug-In and Play
were a boon to advisors who
primarily recommend stock
portfolios to clients. The detail
is impressive. You can specify
minimum or maximum market
cap, book value per share, PE
10, capital expenditures, cash
dividend payout ratio, dividend
yield, EBITDA, quarterly
retained earnings, return on
invested capital, diluted earnings
per share, gross profit, free cash
flow, long-term debt and interest
expenses, quarterly stock
buybacks, moving averages
over various periods—and, of
course, performance. All of
it could be sorted and ranked
by any variable, and any set
of stocks could be graphed
over time against each other or
indices, if you want to look for
positive or negative business
momentum. Many advisors were
using YCharts simply as a way
to evaluate the legacy equity
positions that new clients were
holding in their portfolios.
If they were unusually
sophisticated, advisors could also
stay on top of macroeconomic
Synopsis: YCharts now lets you screen mutual funds— making it suddenly relevant
to mainstream advisor practices.
Takeaways: The best features come with a tight integration with Excel, allowing you
to create customized spreadsheets for detailed analysis—or simply to track the performance
Portfolio Management: The newversionofYChartsofferssome impressive mutual fund
selection tools--and even more interesting Excel plug-ins. – page 15
of your model portfolios.
Page 15
Page
- www.bobveres.com
VOLUME 25, NUMBER 7 JULY 2015

2. Page
Inside Information July 2015
16
inflation hedge to their clients
or reading audience. (The two
actually tracked kind of similarly
until suddenly they went their
separate ways since the end of
2012.)
But of course, all of this is
peripheral to the core investment
activities of advisors who
primarily put client assets in
mutual funds and ETFs. Over the
last five months, all these exotic
tools that YCharts provides
have suddenly become far more
.rosivdaegarevaehtottnaveler
They can now be applied to the
mutual fund and ETF universes.
How does it work? Start
with the dashboard. You can
log into YCharts and customize
the front page by inputting
the components of your model
portfolios. This allows you to
watch your ETFs, funds, indices
and individual stocks by a variety
of metrics: today’s performance,
of which are familiar only to
people who read tea leaves and
make reallocations based on
conditions on the ground. You
can also have a watch list of
funds that might replace the
funds in current portfolios, and
keep an eye on them as well.
The fund screening tool,
.scirtemesohtfollasetaroprocni
Take the equity fund universe
and filter out any fund with
an expense ratio greater than
50 basis points, a beta higher
than 0.75 and 10-year returns
lower than 10%. Then add a
bunch of other metrics, like the
historical 5-year Sortino Ratio,
or the Expected 10-year Traynor
Measure, effective duration
(for bond funds), percent of
total assets in each fund’s top
10 holdings, the weighted
average median return on equity
of the fund’s holdings, and a
bewildering variety of moving
averages. You can sort the funds
that make it through your screens
based on the highest or lowest of
any of these metrics, including
performance.
Of course, YCharts lets you
graph any and all funds against
any index or economic data you
can think of and more than a few
.detsixedetcepsusrevenuoy
“Some advisors are looking at
the mutual funds they’re holding
and comparing them to ETFs,”
says YCharts director of account
management Caleb Eplett.
But increasingly, the most
valuable feature that YCharts
offers is its Excel plug-ins,
which expands the utility of the
YCharts database in a hundred
different ways.
You can find the plug-
in at the very bottom of the
“tools” menu, which asks you
to download an Excel add-
in that will be your dynamic
connection between YCharts
data and the spreadsheets you
create. Then, when you build a
simple spreadsheet, find the data
you want and click “export to
Excel” to pull the fund names
and information (Beta, Treynor
.strahCYmorfpu).cte,oitaR
The spreadsheet can include the
percentage allocations in this
particular model, which lets
you calculate the aggregated
performance of the model and
monitor it in real time.
“Dynamically linked”
means that when you hit
“refresh,” the data automatically
updates in your spreadsheet from
Excel. You can see the total return
for that combination of funds in
Over the last five months, the exotic tools
that YCharts provides have
suddenly become far more relevant
to the average advisor.
trends with an eye toward making
their portfolios less susceptible
.stnempolevedemosirrowot
Some advisors, and a surprising
number of journalists, signed on
because they could create charts
that show movements of, say,
the price of gold compared to
the U.S. Consumer Price Index,
and illustrate gold’s value as an
one- and 3-year returns, expense
ratio, dividend yield, Sharpe
Ratio, Sortino Ratio, all listed in
columns along the side of each
fund. For fixed income funds,
you can see, in real time, any
changes in the yield, discounted
premium, the average maturity
of the fund’s holdings, and
about 20 other metrics, some

3. July 2015 Inside Information
Page 17
those percentages over any time
period—and you can change the
time period from one particular
day to another particular day
.sraeyroshtnomfodaerpsarevo
This is one of the features that
Michael Beck, senior manager
at Gerald L. Ray & Associates
in Dallas, has used often with
clients. “With Morningstar, we
get end-of-the-month or end-
.syaseh”,srebmunretrauq-fo
“YCharts gives us up-to-the-day
pricing, and even during-the-day
pricing, so we can use current
information and evaluate it as we
choose to.”
Such as, for example,
.stneilchtiwgnitacinummoc
“Our clients are asking for
custom information all the
time,” says Beck. “When you
evaluate accounts and returns
and performance, it’s rare that
we just get end-of-the-year
requests,” he adds. “A lot of time
we need custom dates.” With
YCharts, he can show a client
the date that a certain stock or
ETF was added his portfolio,
so he can know exactly how it
impacted the performance.
The same feature appealed
to Jake Erlendson, portfolio
manager with Dowling & Yahnke
in San Diego. “What was really
appealing about the program
was that you could look up total
returns for any combination of
mutual funds for any period of
time,” he says. “That allows us
to compare different investments
over very different economic
environments.”
Although Dowling &
Yahnke takes a generally passive
a growing library of Excel
templates which have been
created by the YCharts staff for
other advisory firms. “We’ve
built tons of templates over
the last several months, since
we launched the fund data,”
says Eplett. He adds that some
advisors are using customized
spreadsheets to explore
attribution issues, looking at
where their holdings differed
from the benchmark and what
.ecnamrofrep-rednuro-tuootdel
“I stack the different funds
vertically, and you can see the
stock sector exposure and other
.snialpxeeh”,ataderusopxe
Voila! You can see each fund’s
exposure to basic materials,
communication services,
consumer cyclical, consumer
defensive, energy, financial
services, health care, industrials,
.seitilitudnahcet,etatselaer
You can then calculate composite
ETFs with financial exposure,
downloaded the data into Excel
and sorted by sector and country
exposure.
“We focused on the ten ETFs
that had the most concentrated
exposure that we’re looking for,”
Beck adds. “Then we pulled in
their top holdings, did a cross-
reference, narrowed it down to a
handful that we liked, and then
went back into YCharts to do a
deeper analysis. One was too
much like a regional banking
index. Another had too many
insurance companies. We kicked
out all the ones with heavy U.S.
exposure, and focused on the
ones that were invested in banks
vs. insurance companies, vs.
financial services, and those
that were international rather
than domestic, and then the mix
of developed vs. emerging, and
what countries or regions they
were exposed to.”
For attribution analysis,
you can dig down and see each fund's
exposure to a variety of industry
categories, or to different stocks, and compare
that with the benchmark index.
investment approach, Erlendson
has found that his team likes to
evaluate the funds they’re using
vs. alternatives in the fund and
ETF world. “You can look at,
suppose we had these funds
syaseh”?srehtoesohtfodaetsni
“How would we have done? How
well do the funds play together?”
The program now includes
exposure, and compare that with
the benchmark index.
Or you can drill into fund
exposure to different stocks. “We
were looking at our exposure to
U.S. financials,” says Beck, “and
were wondering about migrating
”.semanlanoitanretniemosotni
He used the YCharts equity
screener to, first, search for

4. Page
Inside Information July 2015
18
The typical YCharts onboarding process
will involve Eplett's staff
building or adapting customized
spreadsheets that will link to
YCharts data in specific ways.
There are similar
capabilities in the bond arena:
if 40% of a portfolio is in fixed
income, you can check to see
that 30% overall is in Treasuries,
another 15% in munis, and then
drill down to the percentage that
is rated AAA, AA, A, BBB, BB,
B or Below B, respectively.
Erin Neece, a wealth
management association with
portfolio with the right indices
that relate directly to their
accounts,” Neece adds. “We
show charts almost every time
we sit down with clients.”
Eplett says that the typical
onboarding process, when
advisors first come to YCharts,
will involve his staff building
(or adapting) customized
spreadsheets that will link to
over to using YCharts at a small
fraction of the cost.”
Erlendson confirms that
YCharts was responsive to his
spreadsheet requests. “We
just said, you know, it would
be really nice if we could do
this—and they went back and
built it in Excel and delivered
it to us,” he says. “Now, when
we have a project, they’re very
responsive in helping us build
those templates.”
Beck says that most of the
time, in his experience, the tool
.metsysehtnierehtydaerlasi
“We tell them how we’re trying
to download and organize this
information, and they’ve already
got it,” he says. “Instead of us
spending a day designing it, they
can tweak these tables for us, and
that lets us get a lot of information
quickly. We haven’t,” he adds,
“seen that level of service from a
lot of providers.”
Right now, YCharts is being
adopted more rapidly around the
profession than any program I
know of. With the new mutual
fund screen tools, and especially
the enormous flexibility the
program gains with its symbiotic
relationship with Excel, it has
shifted from a really interesting
niche program to a mainstream
product, relevant to pretty much
any practice. You can try it
for free and see if the program
justifies its $3,600 annual cost;
just go to www.ycharts.com and
see what you think.
Maybe you can also help
me understand what a Treynor
Ratio is.
Gerald L. Ray & Associates,
says that her firm is also using
the moving average tools and
charting functions, to get a sense
of whether individual stocks in
the portfolio may be over- or
undervalued. “That's not our
number one buy indicator,”
she says. “But at the click of a
button, you can see all of those
things on one page, which helps
your evaluation.”
The company is also using
YCharts to provide general
market information for its client
newsletter. Meanwhile, the firm
also manages 401(k) plans, and
can now show plan participants
how their accounts are tracking
versus the S&P 500, world
indexes and an aggregate bond
index. “If we were meeting with
an individual participant, we
might compare their customized
.syawcificepsniatadstrahCY
“We find out how they run their
businesses and what templates
they need,” he says, “and
then we have literally created
hundreds of different customized
spreadsheets that will make their
job as easy as possible.”
Of those hundreds, the
.52sedulcniwonyrarbil
“We don’t make public the
personalized custom templates
that are proprietary to an
.snialpxettelpE”,mrifyrosivda
“But a lot of times, they’ll have
a need, and we’ll say, there’s a
template in the library that’s
pretty close, and we can make
a few changes for you. Other
advisors already have models
that pull in data from FactSet,
CapitalIQ or Bloomberg,” he
adds, “and we can convert them
into our syntax and flip them

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