A quarter or two ago I started to recap my quarterly performance as measured by a generic version of client portfolios that I keep on Yahoo Finance. The holdings are representative to be sure but may not be exactly the returns a client may get, although it is close.
The number this quarter for the portfolio is somehow too good so in addition to giving results of that portfolio I will also give numbers (percent not dollars) of two client accounts, one that tilts more conservative and one the other slightly more aggressive. There may be clients that have done better or worse than any of the numbers.
I'm not sure if I made a mistake with the generic portfolio or not. The goal here is to provide some accurate numbers of how all the things I write about play out. If you even care about such things, feel free to take the under.
For the quarter the S&P 500 Index was down 1.90% (closed on 3/31 at 1294.87 and today at 1270.19). If you add the dividend in, I believe 1.7%, that would add 42.5 beeps and so the S&P 500 total return was down 1.475%.
The more aggressive client was down 0.0006% (less than $200). The more conservative client was down 0.8%(this clients has more in fixed income). The generic portfolio on Yahoo Finance
was up 0.44%. While I think the difference is not huge the small decline is more representative. From those numbers fees would need to be subtracted. Quarterly fees range from 25 beeps to 37.5 beeps (I do not know the fees of every account I manage as I do not negotiate fees with many clients).
So the quarter was a shades of gray beating of the S&P 500.
Like every investor there are things I could have done better and things I could have done worse but those are the numbers.
Wikinvest Wire
6 comments:
Roger, kudos to you for open disclosure. However, you do open the door for pet peeves. First, while most of the financial industry uses the s&p as the benchmark I do not think this is appropriate unless you only invest your clients in large cap growth equities. Much more appropriate to use a benchmark that represents the universe of equities, cap weighted, of which you choose from to invest. And, I do see more mutual funds doing this. Eventually, there will be an etf world index but for now, why wouldn't you use your own based on the wilshire 5000 and the EFA? If not, why continue to use the s&p500?
Second, your financial institution should give you the software that daily lets you know where your performance is relative to the selected benchmark with YTD and quarterly figures. Performance requires effecient, accurate and user friendly feedback.Perhaps, you already have this information on hand...my apologies for a false assumption.
My understanding is the S&P 500 is a total return index, so no need to add in the dividend - you are double counting. Let me know if I am wrong.
The idea the SPX is flawed as a benchmark, no argument but also not my job to pick that. A big part is that clients are more familiar with SPX but this is beyond my span of control.
I work from home four days a week. The program is massive and I have no plans to put it on my computer. The way to access is would be through a VPN. I have something from Cisco loaded into my computer that has never worked and we are looking to trying something else. This is also beyond my span of control.
In calculating SPX I took the close from today vs the close from 3/31 and did the math. I'm not sure where the dividend would fit in. If you are correct, well bully for me but I don't think it captures the div otherwise.
It is really nice that periodically you provided us real life performance data of a money manager. This is much more meaningful than the performance from a trader or a service that advertises trading results. Whatever benchmark you choose is allright with me.
High Alpha
I have a question about bonds. Is now a good time? One would get the benefit of interest plus possible cap appreciation. If you sense that the year will be negative to flat, as you mentioned, why not hunker down in a high yield bond fund? Some bond funds I looked at are down 2-3 percent ytd and paying well over 6. With six months left, that's 3 percent plus possible appreciation. The possible part is the catch. If we go into recession, as you fear, then would these funds be in trouble? Hey, thanks for the performance figures.Keeping us all honest.
High Alpha, thank you.
To the question about bonds, I will address that in a post for Monday morning.
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