Allocation Asset assignment due 3/9/2012
Overview:
Create an investment portfolio on line using the portfolio manager at Morningstar.com or a similar program.
The portfolio should contain a minimum of three holdings, at least 2 of which must be mutual funds.
Once the initial portfolio is created and printed, add another mutual fund as an additional holding. Note the
change in the portfolios standard deviation and other risk factors.
Details:
Go to Morningstar.com (or a similar site if it can accommodate essentially the same features noted below).
Click on portfolio- you will be required to register (deselect yes Id like to receive periodic newsletters+ if
you wish), but there is no cost (although they offer a 2 week free trial of the premium membership this is not
needed for this assignment). You may enter fictitious information if you wish (including email address) and it
will still register.
Navigate to portfolio then choose: 1) create new and 2) Portfolio in portfolio manager
1) Enter at least 3 securities holdings (you will need to look up the ticker symbols) - at least 2 must be mutual
funds. You may want to enter actual holdings that you own (in your 401K, IRA or other account) or choose any
that interest you. Diversification here is desirable- you should approximate the asset allocation that was the
result of your risk propensity exercise that we did in class ( example: 40% large cap, 20% mid cap, 20% small
cap, 20% international). Morningstar has another tool called portfolio allocator which is also free and is
designed to help with this or you can use data the tools you will enter below to modify the preliminary portfolio
as needed.
Choose portfolio monitoring features if desired and then click done then done again.
Select Revert to Portfolio Manager CLASSIC (just below latest news on left side) ----NOT enhanced
portfolio manager. Then click on my view.
Click customize my view and then add the following columns:
Name, equity style box, standard deviation, Alpha, Beta-3 year, R squared-3 year, 12 month return, 12 month
return% rank category/industry, and any others that interest you.
Print out the resulting portfolio chart.
2) Add an additional mutual fund holding and note the difference in the total portfolio risk factors compared to
the original portfolio. Print out the revised portfolio chart.
Submit the 2 printouts by the due date.
Optional:
In portfolio manager you can also click on my performance and see graphs that compare your portfolios
performance to various indexes as well as by investment style category (Large growth, Mid Value etc).
Another free tool called compare allows the comparison of 2 or more stocks or funds on an array of different
factors and ultimately gives each holding an overall score. Swapping in a new investment will allow you to see
how it effects your portfolios asset allocation, investment style mix, sector weightings, etc.
There is also a watch list for securities that you may be thinking of adding to your portfolio as well as dozens
of other free features. Also you can request portfolio updates by email or alerts if there are significant events
effecting one of your holdings.