Average Daily Balance.

[aviator]

Hi Mark,

Is there a way to obtain the average daily balance for a portfolio?

Thanks.

[Mark]

Hi aviator,

There isn't a built-in field for this, but if you're using the Professional or Advisor version you can define your own field for the Custom report, using the equation:

AVERAGE(STARTDAYS() ,ENDDAYS() ,End_value ,0 )

Which will calculate the average ending value for every weekday between the starting/ending report dates. If you want the weekends to be included in the average, set the last parameter to 1 instead of 0.

[aviator]

Mark, thanks.

Question: Is there a way to apply a formula to my average daily balance (professional user)? I need to apply a tiered fee structure based on the average daily balance (ADB). The fee structure looks something like:
If ADB < x, fee = 7 basis points
between x and y, 5 basis points
between y and z, 3 basis points
over z, 1 basis point.

Is there a way to do this within FM, as I'd prefer not to export to a spreadsheet.

Thanks.

[Mark]

Hi aviator,

This is available in the Advisor version, as part of the Management Fee feature. You can calculate management fees based on a variety of values, including Average Value. You can use a tiered fee structure, where you assign different percentages at different values. See the documentation on management fee methods. Here is an example:

Example of Average Value and Tiers

AvgManFee.png (8.6 KiB) Viewed 2247 times

You can have up to 5 tiers defined per management fee method. You can define as many different management fee methods as you want.

This feature isn't available in the Professional version, but you could do it outside of FM in Excel by exporting reports to a CSV file.

[aviator]

Thank you. The upgrade page doesn't mention backward compatibility. If I upgrade to Advisor but can't justify the additional cost, how difficult is it to go back to professional?

[Mark]

Hi aviator,

The data files are all interchangeable, so you can easily switch back/forth between the different versions without fear of losing data. As always, please make sure you keep a backup before switching versions. You can just use "File / Backup..." right before you install the new version, just in case...