Advisely PartnerAMA: I'm Jess Lamb, Xplan expert and Director at Practice Dynamix, Ask Me Anything!
Hi,
I’m looking to benchmark client portfolios against appropriate peer group benchmarks, such as the Morningstar Target Allocation Index or the Financial Express unit trust peer group (e.g., FE UT PG Multi-Asset Balanced Index used by Lonsec) in IPS.
In the product lists, I see various options labelled as Market Index, but I can’t determine their source or asset allocation (default 100% other).
Am I missing something? Is there a way to benchmark a client’s portfolio to a recognised industry peer multi-asset index?
- jessica.lamb
One of the key features of the XPLAN Benchmarking area is the ability to benchmark your client’s portfolio against any IPS product. This flexibility can be both advantageous and somewhat challenging, depending on the index you wish to use.
When reviewing Benchmarks to add to IPS reports. Here is my tip:
To ensure you're selecting the correct benchmark for your client, I recommend navigating to Portfolio > Maintenance > Products. From there, you can search for your chosen index by name. If you're uncertain of the exact name, you can use the Portfolio Wildcard (*) to help locate the product. More details on how to use the wildcard can be found here.
Once you’ve located the relevant index, review the Price area to ensure the benchmark is regularly updated. This is where is is going to draw the historical return information from. If it has a consistent price feed, it is likely a suitable benchmark for your client’s portfolio.
The new IPS Analytic page within the client’s profile is a great tool for reviewing the client’s portfolio in relation to the benchmark options you've selected.
I have a little video on Benchmarking. I could probably spend 1 hour on this, but I tried to cover it in under 7 minutes:
Thanks Jessica,
Thank you for the response and video. I understand that the answer required is longer than the time you have available. I am interested in hearing if you have further insights on how firms are creating peer-relative indexes to monitor client portfolios, as opposed to building portfolio benchmarks that use asset class indexes for each asset class. Clients typically wish to see their performance relative to the applicable average fund (peer relative) rather than a constructed asset class index, making peer-relative more applicable. I cited examples like the Morningstar Target Allocation Index or the Financial Express unit trust peer group. Is this feasible, or does it require a paid data feed subscription?
In the product list, there are options such as "Wholesale Allocated Pension Diversified - Balanced Index - FX273AU," which appears to have historical and updated pricing, but the asset allocation shows 100% other. I am unable to find more information in the community or by lodging a ticket via the iress service desk about these options listed in the product list to understand them better and determine applicability. Apologies for the lengthy message; I just want to ensure I've looked at all avenues before jumping of this horse (for now). marc.fraser-jones I'm tagging you in case you have some solutions?- luke.watson3
Advisely Contributor
shane.oconnorHi mate, have you had any luck with this at all? I m trying to do the exact same thing and use the Lonsec Multi-Asset funds as the benchmark, but am struggling also.
