How to Build a New Portfolio with Existing Portfolios

[ThomasK]

I wish to construct 3 New Portfolios using different weights of Existing Portfolios.

The scenario is to arrive at the 3 New ones as - Low Risk, Medium Risk, High Risk

The Existing Portfolios are: Bonds, Bullion, Indices, Sectors, and Stocks.

For example, for the "Medium Risk" portfolio I would like to construct it as:
15% Bonds
10% Bullion
20% Indices
35% Sectors
20% Stocks

How would I do this? Ideally it is with "LINKS" but how do I specify weights? I of course really just need this as a REPORT, yes?

Thanks,
Thomas

[Mark]

Hi Thomas,

There is no feature that automatically allows you to combine percentages of different portfolios into a new portfolio. Link portfolios link the whole portfolio.

You could do this in a slightly manual manner by creating an investment for each of the source portfolios, and then purchasing the desired percentage in these synthetic investments. You would use the command "File / File Operations / Create Investment from Portfolio...". This command updates the closing prices of this new investment with the daily market value of the selected source portfolio. You could repeat this for each of your 5 source portfolios, so you would have 5 investments, one for each of the source portfolios. Then, you would record a buy into each investment with the weighting that you want.

[ThomasK]

Excellent. I'm going to guess that FundManager keeps updating the totals of this synthetic investment once set up, yes?

I see how I can create a Synthetic Investment, however when it asks for Price and Shares I am just putting $1 and 1?

How does Fund Manager calculate the value of the Synthetic? How do I record the weights exactly?

[Mark]

Hi Thomas,

Sorry, no, the investments do not auto-update. They only update when you run that "Create Investment from Portfolio..." command.

For entering the buy, I would figure out the total value, and then divide by the share price on the purchase date, to get the shares. So, if you want 15% of a $100,000 portfolio, purchase $15,000 at the market price on the date you record the buy. (Do not use $1 price and 1 share.)

This investment works like all other investments. The market value is the number of shares owned times the market price.