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ChadLowry Employee
Employee

AMA (Ask Morningstar Anything): Working with Portfolio Objects | February 4-8

During the past few months, a significant amount of work has been done to develop the model portfolio and client account capabilities in the Morningstar Direct Cloud editions. Some of these features include:

  • Applying settings (such as benchmarks and a policy) for proposals that are unique from the client account with which they are associated
  • Entering platform fees for client accounts to model the impact of what a client will pay over time
  • Creating and assigning an investment policy for Total Portfolio Attribution
  • Calculating a Morningstar Sustainability Rating for a model portfolio or client account
  • Setting unique expense rates for holdings when calculating Total Portfolio Attribution
  • Grouping holdings via the use of standard or custom classifications
  • Including new components for portfolio templates in the standalone version of Presentation Studio
  • Entering user-defined data for report templates at the time of report generation, and more.

Ask about any of these portfolio object capabilities, or others, in the upgraded web-based version of Morningstar Direct to ensure you are making the most of your experience with the new platform.

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14 Replies
CarlC Employee
Employee

Re: AMA (Ask Morningstar Anything): Working with Portfolio Objects | February 4-8

Hi Chad,

Thank you for hosting the AMA session. A client wants to efficiently leverage the Total Portfolio Attribution capabilities on  Direct for Wealth Management and they want to enter their policies now that they have their models and accounts imported. They have over 20 policies and they were looking into an efficient way to get them all into the cloud. What would be the most efficient method to get these policies entered into Direct for Wealth Management. 

Thank you very much.

 

Carl

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ChadLowry Employee
Employee

Re: AMA (Ask Morningstar Anything): Working with Portfolio Objects | February 4-8

Hi Carl,

Thank you for our first question in this thread! You and the user are correct in that the one method we have today for creating investment policies is to enter them manually. We do not yet have the means to import these objects, but this feature request is on the roadmap for our Custom Data and Import product team. Nevertheless, a user need not start from scratch each time a policy needs to be created. I recommend doing the following:

  1. Create an investment policy and save it.
  2. In the Investment Policy window, use the Save As command to give the policy a new name.

    SaveAs.gif



  3. Make changes to the new policy, as needed.
  4. Save the policy.
  5. Repeat steps 2-4 as needed until all policies are created.  

Using this method means not having to re-enter each asset class anew for every policy.

Thank you,

 

Chad Lowry

CarlC Employee
Employee

Re: AMA (Ask Morningstar Anything): Working with Portfolio Objects | February 4-8

Thank you Chad. This is very useful. 

Carl

ayojay
Follower ○○

Re: AMA (Ask Morningstar Anything): Working with Portfolio Objects | February 4-8

Hi Chad,
In the Morningstar Direct desktop application, I import fund of fund model portfolios to create snapshot analytical reports.  Will I be able to do this in the cloud edition?

JayCapture.JPG

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LexZ
Follower ○○

Re: AMA (Ask Morningstar Anything): Working with Portfolio Objects | February 4-8

Please point me in the right direction as to the best way to set up a comparison of our recommended mutual funds to indices we use for each.  Data points we use are trailing 1-3-5-10 years returns, 3 and 5 yr vol and Sharpe and worst quarter, max drawdown.  We track about thirty mutual funds with about 10 indices.  We plan on running this comparison on a quarterly basis to identify significant over/under performance.

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ChadLowry Employee
Employee

Re: AMA (Ask Morningstar Anything): Working with Portfolio Objects | February 4-8

Hi @ayojay,

Thank you for the inquiry. Let's consider your request in two distinct parts:

  1. How do you import model portfolios into Morningstar Direct Cloud?
  2. How can you see a report for the model portfolio once it exists in Morningstar Direct Cloud?

First, you can import model portfolios into Morningstar Direct Cloud today. The key is to have a Microsoft® Excel® sheet formatted correctly with the data you need to bring in this portfolio object. You can read about the data import requirements, but the short version is to include the following data in the Microsoft® Excel® file:

  • Portfolio ID (an alphanumeric code you use to uniquely identify the model)
  • Portfolio Name
  • Portfolio Date
  • Holding ID (something like ticker, SecID, ISIN, etc.)
  • Holding Name
  • Weight (you can use Weight in lieu of Shares, Price, and Currency, but be sure the Total = 100% exactly)

Once the file is ready to import, use the Menu to access the Import page.

MenuImport.gif

Select the file type to import, and the file to upload.

SelectFileType.gif

Next, ensure the columns are mapped correctly, and indicate whether the Microsoft® Excel® file uses a header row. The next step is to preview the data to ensure everything looks correct, and finally to import it. 

Import.gif

Second, considering your need to see a report for the model portfolio, it is important to note that in Morningstar Direct Cloud, portfolio objects have their own Presentation Studio templates. Rather than using an off-the-shelf Snapshot report or a Factsheet or Workbook template, they reference Portfolio templates. Portfolio templates are a new variety available only from the standalone version of Presentation Studio. Therefore, that application needs to be downloaded and installed on your computer.

A Portfolio template can then be designed to contain the type of information you would see on a Snapshot report and published to Morningstar Direct Cloud. (Please confirm with your Customer Success Manager that the Publish capability is enabled for you, so you can push templates from the standalone version of Presentation Studio to Morningstar Direct Cloud.)

If you have additional questions on this process, please let me know.

Thank you,

 

Chad Lowry

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ChadLowry Employee
Employee

Re: AMA (Ask Morningstar Anything): Working with Portfolio Objects | February 4-8

Hi @LexZ,

Thanks for the question! The answer should be helpful to all Morningstar Direct Cloud users, and I can offer a couple of options, but first it would help me to know a bit more about the workflow before I recommend a specific path.

Are the 30 funds all part of the same Morningstar Category, or how many different categories would be covered? Similarly, for the 10 indices, do these all represent the same Morningstar Category, or different categories? What is the most number of indices you would use in comparison to the funds from a Morningstar Category?

Thank you,

 

Chad Lowry

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dpateltides
Follower ○○

Re: AMA (Ask Morningstar Anything): Working with Portfolio Objects | February 4-8

In Asset Allocation - there are certain classes for which the market cap isn't available (Black Litterman). I understand it may be hard to pin down archaic areas like commodities, but how come the market weight for something as simple as Barclays Agg (as a fixed income benchmark) isn't available? At the very least, it would be great to have market weights for fixed income and private equity.

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canterj1
Follower ○○

Re: AMA (Ask Morningstar Anything): Working with Portfolio Objects | February 4-8

Where can I find the monthly Best Ideas List article, and the corresponding Equity Best Ideas List interactive table as seen in the screenshot with the two ovals?

 

Thanks.

best_ideas.pngBest Ideas List in Equity Research

 

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ChadLowry Employee
Employee

Re: AMA (Ask Morningstar Anything): Working with Portfolio Objects | February 4-8

Hi @canterj1,

I appreciate the question. I have a mixed bag of news to offer you on this subject. The bad news is that not all of the Select Equity/Credit research material found in the desktop version of Morningstar Direct can be found in the web-based version of Morningstar Direct. So that exact report cannot be found in the Morningstar Research area of Morningstar Direct Cloud.

That said, I do have another option for you for a similar offering in Morningstar Direct Cloud. Start by going to the Morningstar Research area:

Research.gif

Next, select the Publications page and click the Equity Weekly Highlights tile:

Publications.gif

This page shows you a weekly report our Analyst team produces. The report is similar to the one you see under the Select Equity/Credit Research module in the desktop version of Morningstar Direct. You can click the Follow button in the upper-right corner of the Equity Weekly Highlights page to be notified whenever a new report is available.

Additionally, remember that an advantage of viewing this content in Morningstar Direct Cloud compared to the desktop version is that in the web-based version, you can use the Action icon on the page to save the mentioned securities to a list, then open that list in a workbook and examine any equity data points you want, rather than simply looking at those shared on the report.

SaveAsNewList.gif

Thank you,

 

Chad Lowry

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JohnRaffles Employee
Employee

Re: AMA (Ask Morningstar Anything): Working with Portfolio Objects | February 4-8

For some equity and fixed income asset classes, you're in luck! You can look up the market cap in Local/Global Databases or Workspace and enter the value into Asset Allocation.

For equity indexes, you can use the data point Equity Market Value to look up the market cap of the index. Just be careful with the decimal places because the Equity Market Value will give you the full number, while Asset Allocation uses billions.image.png

image.png

For fixed income indexes, you can get the size of the index by using the version of the index that ends in "MV" for market value.

Use the data point Market Price (Daily) available under the Market Indexes data universe. The value is in millions, but Asset Allocation is in billions, so use caution with your decimals.

image.pngimage.pngWe don't have any data on the size of the PE market, but some research shows that this number is probably around $3-5 trillion in assets under management. It's a difficult market to measure and it has some bumps in it's inclusion in a Black-Litterman model. Black-Litterman is based on the market existing in equilibrium, which is more likely when only trading across public markets. In theory, it's there is some friction in moving money between public and private markets, meaning the model may provide less than scientific implied returns when including PE (or direct real estate). 

TimPav
Follower ○○

Re: AMA (Ask Morningstar Anything): Working with Portfolio Objects | February 4-8

Hello,

Is there an easier way to import returns into Direct?  I currently import a file.  Thank you.

 

Sincerely,

 

Tim 

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ChadLowry Employee
Employee

Re: AMA (Ask Morningstar Anything): Working with Portfolio Objects | February 4-8

Thank you to everyone who participated in last week's AMA on the web-based version of Morningstar Direct. It was great to hear from so many of you. Please note that we have exercises available for you to practice working with custom benchmarks, model portfolios, and investment policies. We're also working on new guides for the Academy page with even more exercises, as well as work you can do with client accounts and proposals. Look for this new material to be arranged in a unique tile soon. 

We look forward to seeing you continue to post your questions about Morningstar Direct, as well as sharing your ideas on how to make the best use of the application with your fellow users!

Thank you,

 

Chad Lowry
Morningstar, Inc.

ishaansaraswat Employee
Employee

Re: AMA (Ask Morningstar Anything): Working with Portfolio Objects | February 4-8

Hi @TimPav,

Thanks so much for your inquiry. The current format of importing the excel file with monthly returns is the most efficient process. We can use Back Office Services to import the returns on behalf of you for an extra charge.

Thanks!

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