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Creating Custom Benchmarks

While PortfolioAnalyst provides a large number of standard industry benchmarks for you to choose in a Snapshot or Detailed Report against which your portfolio's performance can be compared, there may be situations when a standard benchmark does not provide and adequate basis for comparison. In these situations, you can create your own custom benchmarks in PortfolioAnalyst.

About Custom Benchmarks

Custom benchmarks allow you to combine existing benchmarks already available in PortfolioAnalyst, the combined weight of which must equal 100%. When you select benchmarks for a specific benchmark comparison report, you can choose up to three existing benchmarks including any of your own custom benchmarks.

The return formula for a custom benchmark is calculated as:

Σ(Benchmark Weight X Benchmark Return)

Here is an example of a custom benchmark. In this example, a custom benchmark has been created by combining three existing standard benchmarks:

Index Weight Return
Russell 2000 40% 20.00%
S&P 500 40% 10.00%
S&P US High Yield Corporate Bond 20% 6.00%

 

Based on the weights and returns of each component benchmark, the return for this custom benchmark is 13.20%, calculated as:

(.40 x .20) + (.40 x .10) + (.20 x .06) = 13.20%

Observe the following guidelines when creating custom benchmarks:

To create a custom benchmark

  1. Click Reports > PortfolioAnalyst.
  2. Click the Custom Benchmarks tab. The Custom Benchmarks tab lists all of your saved custom benchmarks. If you have not saved any custom benchmarks, the list will be empty. For example, the abbreviation for the S&P 500 Index is SPX.

  1. Click Create Custom Benchmark.

  1. Type the name of the custom benchmark in the Name field, and type an abbreviation in the Abbreviation field.
  2. In the list of available benchmarks, select the first benchmark you would like to include, and then click Add Benchmark. You can type the first few characters of the desired benchmark in the entry box above the list of benchmarks or type the abbreviation of the desired benchmark. Note that you can select multiple standard benchmarks at a time and add them all at once to your custom benchmark.

The benchmark is added to the Selected list.

  1. Continue selecting and add benchmarks to your custom benchmark as required. Click the Xto delete a benchmark from the list of selected benchmarks.
  2. When you have finished adding benchmarks, enter the weight of each benchmark in the field provided. All benchmark weights must equal 100.

  1. Click Save to save your custom benchmark. It will now be listed on the Custom Benchmarks tab, where you can edit or delete it.

  1. When you select benchmarks for a Detailed report, you will be able to select your custom benchmark. Custom benchmarks are always listed first in the list of benchmarks.