COMPARISON Portfolio Management Software Programs By Cara Scatizzi

No matter the size of a portfolio or be the least sophisticated. The system software. We examine Web-based sys- the depth of investment knowledge, is run entirely within your Web brows- tems in a separate product comparison every investor needs a portfolio man- er and reports are limited to what is (see the July/August 2006 issue of agement tool to track investments displayed within your browser. These Computerized Investing). and generate accurate performance systems are mostly free of charge and reports. Portfolio management allows widely available on the Internet. Over Your Shopping List investors to organize investments, the past few years, these systems have The comparison grid on pages 12 to track portfolio performance, and become more useful, but still do not 15 details the features and functional- assess a portfolio’s asset mix; most stack up to the software options. ity of each program. When shopping will also offer assistance at tax time. Alternatively, some on-line services for a portfolio management program The system will also track buys, sells, have users download a small program there are certain features you will want dividends, splits and other transac- know as an “applet” from their Web to consider including: costs, types of tions within a portfolio for a variety site. The applet is installed on your securities handled, transactions han- of securities. Performance data can hard drive, and analysis and report dled, reporting strength and flexibility, be measured over various timeframes generation is performed locally on data updates, and ease of use. and most programs will allow users to your computer using data from an graph and print reports. Internet feed. Applet-based systems Costs This comparison examines portfolio are more likely to require a paid Costs of the program go well beyond management software systems de- subscription that usually provides the retail price tag. Time spent learning signed to help you accomplish these access to stock and mutual fund data how to use a program, configuring it tasks. and screening. Applet-based systems to your data source, and entering trad- Since our last comparison of these usually offer greater functionality than ing histories and individual security systems in the July/August 2005 issue, HTML-based systems. information should be considered Captools has discontinued its portfolio In the past few years, the Web-based part of your overall cost. In the long management tool for individual inves- systems, especially the applet-based run, these issues alone far outweigh tors. They now only offer Captools/net ones, have become easier to use and the importance of the initial price of for professional investors. Current more sophisticated in order to compete a program. Captools users may wish to read the with the software programs. However, To be sure you are making the sidebar on page 10 for other programs neither type of Web-based portfolio correct choice for your needs, take that allow you to transfer your existing manager can yet replace the best soft- your time and consider all factors, portfolio data. In addition, Reeally! Pro ware-based systems. Most Web-based including those beyond out-of-pocket is no longer in existence. services have limited capabilities for costs. When analyzing your situation, reporting on realized gains and losses consider not only your current needs, The Features and investment income; return cal- but any possible future needs as well. culations are generally less powerful Many vendors will offer demo ver- Portfolio management systems can as well. sions of the programs, usually for free be broadly categorized as three types: The Web-based tools offer speedy or for a reasonable cost. This is a great software-based, Web HTML-based, data and news retrieval and are best way to try out the program before and Web applet-based. considered as a companion or comple- purchasing it. All of the vendors in this Software-based portfolio manage- ment to your software program. They comparison offer some sort of demo. ment systems, in general, will offer are very helpful in keeping you abreast The demo may not be fully function- the most sophisticated tools, greatest of what is happening with your port- ing, but will still allow you to see if the flexibility, and the ability to generate folio and notifying you of any events program is a good fit for you. more extensive reports. You install the that might affect it. software programs to your hard drive, This comparison examines only the Securities/Assets Handled where all analysis takes place. Security software-based portfolio management When looking at the scope of securi- price updates are usually made via the systems geared toward the typical ties accommodated by any prospective Internet. You will pay for the software individual investor. All of the soft- program, consider not only the securi- and possibly for on-going support and ware programs have Windows-based ties or assets that you currently hold, updates. versions, while and Portfolio but also those you might want to pur- HTML-based systems are the most Systems, Inc. offer both Macintosh and chase in the future. All programs cover common on the Web and also tend to Windows versions of their portfolio the basic security classes—stocks,

July/August 2007  bonds, mutual funds, and cash. holdings. These programs can sort Related to the issue of transactions Some programs will specialize in your portfolio into various categories is the ability to specify security lot as- one area, such as options or mutual in order to measure diversification. signments for any given transaction. funds. While the program in question Some programs even measure the Security lot assignments are detailed may cover one area well, it may not diversification within a particular in the comparison grid immediately be flexible enough to track other types asset class. below the transactions section. A lot of securities should the scope of your is the total number of units involved investment holdings expand. Transactions Handled in a given trade. This feature can be If your portfolio includes specialized The transactions supported by the very important to investors interested securities or assets, such as derivatives, program are closely related to the in tax liability issues and tracking pay close attention to whether or not types of securities that the program is performance. the program handles them. Other sec- designed to handle. Make sure that any If you reinvest dividends from your tions within the comparison grid also program you are considering includes mutual funds and stocks, you will relate to security and asset coverage: all the relevant transactions you might find yourself tracking numerous lots transaction types, security lot assign- require. All the programs compared over a long period of time. Any solid ments, reports, and even data services here handle standard transactions portfolio management package will can affect how you track, organize, and such as buy/sell and cash dividends. automatically match buy and sell lots analyze your portfolio. However, the ability to handle short for different accounting strategies for Any solid portfolio management sales and margin are important data the purpose of reducing tax exposure. program should also allow you to points and the programs vary in their These strategies include: first-in-first- measure the diversification of your coverage. out (FIFO), average cost, and specific

Importing Data From Captools

Captools, a CI top pick for portfolio management The imported transaction data was 100% accurate when software programs in the past, is no longer offering its compared to Captools transaction records. Once the services to individual investors. For investors who used data is imported, you must then retrieve prices from the Captools and are looking at the daunting task of starting Internet (go to Edit, then Internet Retrieve, then Prices). fresh with a new portfolio management tool, a few of Make sure to download prices for the entire length of the software programs in this year’s comparison allow your portfolio’s existence so the program will calculate or will allow the importing of Captools data. the portfolio balance on specific dates accurately. Also, if you imported dividends and splits from BetterInvesting Portfolio Manager Captools, uncheck the “Retrieve Dividends” and the BetterInvesting promises that its Portfolio Manager “Retrieve Splits” boxes or the data will appear twice will include the ability to import data directly from Cap- in your portfolio. tools in the near future. The current version includes the One issue we faced concerned a stock that was bought option (File, Import, Captools), but it is not functioning out, meaning the ticker symbol was no longer valid. at this time. The company hopes to have the Captools Fund Manager uses a variety of quote retrieval ser- Converter up and running in the next few months and vices to find historical prices. A stock that has changed will offer a free download to update the program. ticker symbols or was bought out will no longer have historical price data from its services, so Fund Manger Fund Manager “interpolates” the price. For one stock, the interpolated The makers of Fund Manager have posted import price was off by $2.61, in turn making our portfolio instructions on their Web site Go to: www.fundmanager balance off by $208.80. The portfolio balances matched software.com/captools_import.html. The step-by-step again after the stock was sold. You can manually enter instructions take you through exporting Captool data prices after you download them, so the problem can be to a CSV file, transferring the data to a formatted Ex- fixed with a little attention to detail and time. cel file, and importing the data to Fund Manager in the correct format. While the process is not hard, the Portfolio Director and Option Money instructions must be followed closely. Buys, sells, divi- Portfolio Systems does not currently offer a blanket dends and splits can be imported. Splits are imported solution for importing Captools data into either Portfolio as a buy (buying the additional shares at $0 per share Director or Option Money, but will help individuals who for no commissions). Other transactions will have to wish to do so via their outsourced technical support be entered manually. staff ([email protected]).

10 CI lot. Finding an application that han- year-end statements arrive. Tax number and breadth of performance dles all three lot assignment methods Schedule D reports compute long- and reports offered helps some programs is key when looking at programs. short-term capital gains and group as- stand out from their competitors. sets that will yield capital gains with A program that provides reports for Reports tax liabilities. If you are going to rely on securities, industries, and asset classes Reports allow you to analyze your your portfolio management program will not only give you the performance portfolio and investments. The eight to produce these schedules, make sure of each segment, but also will provide applications vary widely in the types that adjustments can be made should portfolio allocation analysis. Some of reports they provide as well as in tax laws change in the future regard- programs allow for an examination the strength and flexibility they offer. ing factors such as short- or long-term among various asset classes—such as Vendors that offer different levels of holding periods and capital gains tax domestic or foreign equities, bonds, or their applications often use report rates. cash—while others provide industry flexibility to differentiate their prod- Ideally, the program should also breakdowns. ucts—one example in this comparison track foreign tax withheld on your It is also important to find a pro- is Portfolio Systems, Inc., which offers securities to help ensure that proper gram that has the ability to produce Option Money and Portfolio Director. credit is accounted for when preparing reports covering single and multiple Portfolio Director is geared toward your taxes. Tax reports are provided for portfolios. You will want a program professional managers and features a given tax year, so programs generally that addresses the diversified aspects a range of performance reports, while include a dialog box to select a given of all your holdings for all your port- Option Money is offered without these year to report upon. folios, rather than one that can only useful reports. Again, check to see if The projected cash flow report serves concentrate on a single portfolio. the programs that you are considering as a forecast of the expected portfolio All of the programs in this compari- have the types of reports you want, cash income from dividends, interest, son provide a return for the current but also look at other reports offered and bond maturities. This report is holding period, which examines gain that you do not currently use in your useful for estimating retirement in- or loss from the time the security is analysis. They might enhance the over- come and allows you to structure asset purchased. Most programs also offer all evaluation of your portfolio. holdings based on future needs. returns for designated periods (be- While you want to be sure that a The issue of flexibility comes into tween-period returns). Programs that program provides enough flexibility play with customized reports and feature the ability to designate time and functionality to complete your batch processing capabilities. Cus- periods allow you to monitor security current task list, consider possible tomization choices range from con- performance during a known market future needs with regard to securities tent-related, such as time period, to environment, as well as to examine all and transactions handled along with cosmetics-related, like column and of your securities over the same time reporting capabilities. row headings or even font size. Batch, period. To designate time periods, a The current holdings report lays out or group, processing simply involves program must be able to store snap- the composition of your portfolio. It completing multiple print jobs of dif- shots of your portfolio holdings and is a basic report that indicates which ferent types of reports at one time. values at specific points in time and not securities are in the portfolio, their Batch reporting is typically found in just the current positions and prices. original cost, current value, gain or products geared for institutional cli- Portfolio return reports paint the loss, and perhaps some security sta- ent reports. clearest picture of how well your in- tistics such as dividend yield, price- Portfolio alerts highlight when a vestment holdings have performed, so earnings ratio or beta. security has crossed some prede- it is important to understand which The holdings by lot report breaks termined price threshold. Such an type of return is best for the individual down the composition report into alert may highlight the need for in- investor. Both a value-weighted (also finer increments, indicating each vestigation that might otherwise go referred to as a dollar-weighted) purchase at a specific date and price. unnoticed. internal rate of return (IRR) and a This gives a clear, detailed history of time-weighted rate of return can be your transactions and provides guid- Performance Reports calculated by portfolio management ance for selecting which lots to sell to The section of the grid entitled Per- software. manage taxes. formance Reports depicts the various For the individual investor looking Tax schedules pertain to the ways a program summarizes how to gauge the true performance of a Schedule B and Schedule D reports. well your investment holdings have personal portfolio, the internal rate Designed for calculating interest and fared. A basic part of the portfolio of return is the best gauge because it dividends received from a portfolio, management process is to determine represents the rate of return earned by Schedule B reports allow you to and analyze performance. These op- your investments. The internal rate of estimate tax debt (or credit) before tions should be studied carefully. The (continued on p. 15)

July/August 2007 11 PRODUCT COMPARISON: Portfolio Management Software

Program Name BetterInvesting Portfolio Manager 5 Fund Manager 8.5 Investor’s Accountant 5.2.28 Premium 2007 Option Money 7.0 Company Quant IX Software Beiley Software Inc. Hamilton Software, Inc. Microsoft, Inc. Portfolio Systems, Inc. Telephone 877/275-6242 480/705-0129 800/733-9607 800/642-7676 888/700-3715 Web Site www.betterinvesting.org www.beiley.com www.hamiltonsoftware.com www.microsoft.com/money www.scscompany.com E-mail Address [email protected] [email protected] Price $169 $69 (Personal); $295 (Professional) $249.95 $79.99 (Premium) $345 or $30/month Demo Available (Cost) 4 (free) 4 (free) 4 (free) 4 (free) 4 ($30) Platform (Mac, Windows) Windows (32-bit Vista-compatible) Windows (32-bit Vista-compatible) Windows (32-bit Vista-compatible) Windows (32-bit Vista-compatible) Mac, Windows (32 bit Vista) Maximum Portfolios/Securities per Portfolio unlimited/unlimited Personal: unlimited/500, Pro: unlimited/2,000 unlimited/unlimited unlimited/unlimited unlimited/unlimited Maximum Securities/Transactions per Security unlimited/unlimited unlimited/unlimited unlimited/unlimited unlimited/unlimited unlimited/unlimited Securities/ Cash/Stocks/Mutual Funds/ETFs 4 4 4 4 4 Assets Bonds (Fixed/Variable/Zero/PIK) 4 4 4 4 (fixed/zero) 4 Handled Annuities 4 4 4 4 Options/Futures/Warrants 4 4 (options, futures) 4 4 (options) 4 Real Estate/Partnerships 4 4 (real estate) 4 (real estate) User-Defined 4 4 4 4 Security Identification (Name/Ticker/CUSIP) 4 4 4 4 (name/ticker) 4 (name/ticker) Classification Account Number/Management Firm 4 4 4 (account number) 4 Asset Class (Predefined/User-Defined) 4 4 (user-defined) 4 4 4 Industry (SIC Codes/User-Defined) 4 4 (user-defined) 4 Transactions Deposit/Withdrawal; Buy/Sell 4 4 4 4 4 Handled Short/Cover 4 4 4 4 Margin 4 4 4 4 Receive/Deliver Security 4 4 4 4 Return of Capital 4 4 4 4 4 Dividends (Cash/Stock/Splits/Reinvest) 4 4 4 4 4 Interest Income 4 4 4 4 4 Bond (Discount/Premium/Amortization) 4 4 4 4 Treatment of Fees/Commissions 4 4 4 4 4 Security Lot Assignments (Avg.Cost/FIFO/Specific Lot) 4 4 4 4 4 Automatic Security Lot Assignment 4 4 4 4 4 Reports Current Holdings 4 4 4 4 4 Holdings by Lots 4 4 4 4 4 Tax Schedules (Interest/Dividend/Capital Gains) 4 4 4 4 4 Projected Cash Flow 4 4 4 Customized Reports 4 4 4 4 Batch Reporting 4 4 4 4 Alerts 4 4 4 4 Performance Security/Industry/Asset 4 4 (security, asset) 4 (security) 4 4 (security) Reports Portfolio (Single/Multiple) 4 4 4 4 4 Holding Period/Between-Period Returns 4 4 4 4 4 (holding period) Value-Weighted IRR/Time-Weighted Returns 4 4 (time-weighted) 4 4 (time-weighted) Tax-Adjusted Returns 4 4 Benchmark Comparison 4 4 (Professional version) 4 Follows GIPS Standards 4 4 4 Data Support Data Services Supported Internet Internet Internet Microsoft Internet Imports Brokerage Transactions* OFX, QFX OFX, QFX, QIF, CSV, TXT OFX, QFX OFX, QFX Import Formats Supported* ASCII, QIF, PRN, XLS, Captools in near future Captools, OFX, QFX, QIF, PRN, CSV, TXT CSV OFX, QFX, QIF TXT, Captools Export Formats Supported* ASCII, QIF, PRN, XLS ASCII, CSV, QIF ASCII, CSV QIF, TXT, CSV, XLS ASCII, XLS, HTML

*Key to import/export formats: – OFX, QFX; – QIF, PRN; Comma-Separated – CSV; Text File – TXT; Excel – XLS; ASCII; HTML – Internet Browser

12 CI Program Name BetterInvesting Portfolio Manager 5 Fund Manager 8.5 Investor’s Accountant 5.2.28 Microsoft Money Premium 2007 Option Money 7.0 Company Quant IX Software Beiley Software Inc. Hamilton Software, Inc. Microsoft, Inc. Portfolio Systems, Inc. Telephone 877/275-6242 480/705-0129 800/733-9607 800/642-7676 888/700-3715 Web Site www.betterinvesting.org www.beiley.com www.hamiltonsoftware.com www.microsoft.com/money www.scscompany.com E-mail Address [email protected] [email protected] Price $169 $69 (Personal); $295 (Professional) $249.95 $79.99 (Premium) $345 or $30/month Demo Available (Cost) 4 (free) 4 (free) 4 (free) 4 (free) 4 ($30) Platform (Mac, Windows) Windows (32-bit Vista-compatible) Windows (32-bit Vista-compatible) Windows (32-bit Vista-compatible) Windows (32-bit Vista-compatible) Mac, Windows (32 bit Vista) Maximum Portfolios/Securities per Portfolio unlimited/unlimited Personal: unlimited/500, Pro: unlimited/2,000 unlimited/unlimited unlimited/unlimited unlimited/unlimited Maximum Securities/Transactions per Security unlimited/unlimited unlimited/unlimited unlimited/unlimited unlimited/unlimited unlimited/unlimited Securities/ Cash/Stocks/Mutual Funds/ETFs 4 4 4 4 4 Assets Bonds (Fixed/Variable/Zero/PIK) 4 4 4 4 (fixed/zero) 4 Handled Annuities 4 4 4 4 Options/Futures/Warrants 4 4 (options, futures) 4 4 (options) 4 Real Estate/Partnerships 4 4 (real estate) 4 (real estate) User-Defined 4 4 4 4 Security Identification (Name/Ticker/CUSIP) 4 4 4 4 (name/ticker) 4 (name/ticker) Classification Account Number/Management Firm 4 4 4 (account number) 4 Asset Class (Predefined/User-Defined) 4 4 (user-defined) 4 4 4 Industry (SIC Codes/User-Defined) 4 4 (user-defined) 4 Transactions Deposit/Withdrawal; Buy/Sell 4 4 4 4 4 Handled Short/Cover 4 4 4 4 Margin 4 4 4 4 Receive/Deliver Security 4 4 4 4 Return of Capital 4 4 4 4 4 Dividends (Cash/Stock/Splits/Reinvest) 4 4 4 4 4 Interest Income 4 4 4 4 4 Bond (Discount/Premium/Amortization) 4 4 4 4 Treatment of Fees/Commissions 4 4 4 4 4 Security Lot Assignments (Avg.Cost/FIFO/Specific Lot) 4 4 4 4 4 Automatic Security Lot Assignment 4 4 4 4 4 Reports Current Holdings 4 4 4 4 4 Holdings by Lots 4 4 4 4 4 Tax Schedules (Interest/Dividend/Capital Gains) 4 4 4 4 4 Projected Cash Flow 4 4 4 Customized Reports 4 4 4 4 Batch Reporting 4 4 4 4 Alerts 4 4 4 4 Performance Security/Industry/Asset 4 4 (security, asset) 4 (security) 4 4 (security) Reports Portfolio (Single/Multiple) 4 4 4 4 4 Holding Period/Between-Period Returns 4 4 4 4 4 (holding period) Value-Weighted IRR/Time-Weighted Returns 4 4 (time-weighted) 4 4 (time-weighted) Tax-Adjusted Returns 4 4 Benchmark Comparison 4 4 (Professional version) 4 Follows GIPS Standards 4 4 4 Data Support Data Services Supported Internet Internet Internet Microsoft Internet Imports Brokerage Transactions* OFX, QFX OFX, QFX, QIF, CSV, TXT OFX, QFX OFX, QFX Import Formats Supported* ASCII, QIF, PRN, XLS, Captools in near future Captools, OFX, QFX, QIF, PRN, CSV, TXT CSV OFX, QFX, QIF TXT, Captools Export Formats Supported* ASCII, QIF, PRN, XLS ASCII, CSV, QIF ASCII, CSV QIF, TXT, CSV, XLS ASCII, XLS, HTML

*Key to import/export formats: Open Financial Exchange – OFX, QFX; Quicken – QIF, PRN; Comma-Separated – CSV; Text File – TXT; Excel – XLS; ASCII; HTML – Internet Browser

July/August 2007 13 PRODUCT COMPARISON: Portfolio Management Software

Program Name Portfolio Analyzer 4.0.22 Portfolio Director 8.0 Quicken Premier 2007 Company Hamilton Software, Inc. Portfolio Systems, Inc. Intuit, Inc. Telephone 800/733-9607 888/700-3715 800/811-8766 Web Site www.hamiltonsoftware.com www.scscompany.com www.quicken.com E-mail Address [email protected] Price $59.95 $300/month $79.99 (Premier); $69.99 (Mac) Demo Available (Cost) 4 (free) 4 ($300) 4 (free) Platform (Mac, Windows) Windows (32-bit Vista-compatible) Mac, Windows (32-bit Vista-compatible) Mac, Windows (32-bit Vista-compatible) Maximum Portfolios/Securities per Portfolio unlimited/unlimited unlimited/unlimited 1,000+/1,500+ Maximum Securities/Transactions per Security unlimited/unlimited unlimited/unlimited 1,500+/unlimited Securities/ Cash/Stocks/Mutual Funds/ETFs 4 4 4 Assets Bonds (Fixed/Variable/Zero/PIK) 4 4 4 (fixed/variable/zero) Handled Annuities 4 4 Options/Futures/Warrants 4 4 4 (options) Real Estate/Partnerships 4 (real estate) User-Defined 4 Security Identification (Name/Ticker/CUSIP) 4 4 (name/ticker) 4 (name/ticker) Classification Account Number/Management Firm 4 (account number) 4 4 Asset Class (Predefined/User-Defined) 4 4 4 Industry (SIC Codes/User-Defined) 4 (user-defined) 4 Transactions Deposit/Withdrawal; Buy/Sell 4 4 4 Handled Short/Cover 4 4 4 Margin 4 4 4 Receive/Deliver Security 4 4 Return of Capital 4 4 4 Dividends (Cash/Stock/Splits/Reinvest) 4 4 4 Interest Income 4 4 4 Bond (Discount/Premium/Amortization) 4 4 4 Treatment of Fees/Commissions 4 4 4 Security Lot Assignments (Avg.Cost/FIFO/Specific Lot) 4 4 4 (FIFO/specific lot) Automatic Security Lot Assignment 4 4 4 (FIFO/specific lot) Reports Current Holdings 4 4 4 Holdings by Lots 4 4 4 Tax Schedules (Interest/Dividend/Capital Gains) 4 4 4 Projected Cash Flow 4 4 4 Customized Reports 4 4 Batch Reporting 4 4 Alerts 4 4 4 Performance Security/Industry/Asset 4 (security) 4 4 (security/asset) Reports Portfolio (Single/Multiple) 4 4 4 Holding Period/Between-Period Returns 4 (holding period) 4 4 Value-Weighted IRR/Time-Weighted Returns 4 4 4 (value-weighted) Tax-Adjusted Returns 4 4 Benchmark Comparison 4 4 4 Follows GIPS Standards 4 Data Support Data Services Supported Internet Internet Quicken Imports Brokerage Transactions* OFX, QFX OFX, QFX Import Formats Supported* CSV TXT, Captools OFX, QFX Export Formats Supported* ASCII, CSV ASCII, XLS, HTML ASCII, XLS, PDF

*Key to import/export formats: Open Financial Exchange – OFX, QFX; Quicken – QIF, PRN; Comma-Separated – CSV; Text File – TXT; Excel – XLS; ASCII; HTML – Internet Browser

14 CI (continued from p. 11) agement programs to offer a direct return is both a value-weighted and connection to an on-line service for Program Name Portfolio Analyzer 4.0.22 Portfolio Director 8.0 Quicken Premier 2007 time-weighted calculation because it price updates. The comparison grid Company Hamilton Software, Inc. Portfolio Systems, Inc. Intuit, Inc. considers the time when inflows and indicates the information services Telephone 800/733-9607 888/700-3715 800/811-8766 outflows are made to the portfolio, supported by each program. The grid Web Site www.hamiltonsoftware.com www.scscompany.com www.quicken.com the amount of these flows, and the also shows the various formats sup- E-mail Address [email protected] combined impact upon the overall ported for exporting and importing Price $59.95 $300/month $79.99 (Premier); $69.99 (Mac) rate of return. information. In most cases, this refers Demo Available (Cost) 4 (free) 4 ($300) 4 (free) The time-weighted return is most only to the transfer of security price Platform (Mac, Windows) Windows (32-bit Vista-compatible) Mac, Windows (32-bit Vista-compatible) Mac, Windows (32-bit Vista-compatible) often used to analyze the performance information. Maximum Portfolios/Securities per Portfolio unlimited/unlimited unlimited/unlimited 1,000+/1,500+ of investment decisions made by a Programs that support OFX stand Maximum Securities/Transactions per Security unlimited/unlimited unlimited/unlimited 1,500+/unlimited portfolio or money manager. The a good chance of importing transac- Securities/ Cash/Stocks/Mutual Funds/ETFs 4 4 4 time-weighted calculation directly tion data from your on-line broker. ignores the impact of any cash added The Open Financial Exchange (OFX, Assets Bonds (Fixed/Variable/Zero/PIK) 4 4 4 (fixed/variable/zero) or removed from the portfolio because or sometimes referred to as QFX) Handled Annuities 4 4 the manager most often does not have specification allows for the electronic 4 4 4 Options/Futures/Warrants (options) control over such events. Not only exchange of financial data between Real Estate/Partnerships 4 (real estate) does an individual have control over financial institutions, businesses and User-Defined 4 these inflows and outflows, but they consumers via the Internet. OFX sup- Security Identification (Name/Ticker/CUSIP) 4 4 (name/ticker) 4 (name/ticker) are also very common with retirement ports a wide range of financial activi- Classification Account Number/Management Firm 4 (account number) 4 4 accounts and will have a large impact ties such as banking, bill payments, Asset Class (Predefined/User-Defined) 4 4 4 on the portfolio’s rate of return. With and investment tracking—including Industry (SIC Codes/User-Defined) 4 (user-defined) 4 the advent of automatic investing, stock, bond, mutual fund, and 401(k) Transactions Deposit/Withdrawal; Buy/Sell 4 4 4 investors are putting money into the account details. Twenty-one brokers Handled Short/Cover 4 4 4 market when it is up (and paying high in our 2007 On-Line Discount Broker Margin 4 4 4 prices for securities) and when it is Guide (January/February 2007 issue) down (and paying lower prices). It support the OFX format, making it Receive/Deliver Security 4 4 is important to take into account the easier to pull in transaction data. Most Return of Capital 4 4 4 various investment prices and holding programs need an account number 4 4 4 Dividends (Cash/Stock/Splits/Reinvest) periods in order to accurately measure and use the same login and password Interest Income 4 4 4 your portfolio’s performance. Look for information you use to access the Bond (Discount/Premium/Amortization) 4 4 4 applications that offer both returns, broker’s Web site. Treatment of Fees/Commissions 4 4 4 but be sure to check for the internal Note that your broker may only keep Security Lot Assignments (Avg.Cost/FIFO/Specific Lot) 4 4 4 (FIFO/specific lot) rate of return. a limited history of your data on the Automatic Security Lot Assignment 4 4 4 (FIFO/specific lot) When a program provides tax- OFX server. Also, brokers may vary Reports Current Holdings 4 4 4 adjusted returns, this simply means in the data available for download via Holdings by Lots 4 4 4 that it generates pretax and aftertax OFX. Some firms will only have buy Tax Schedules (Interest/Dividend/Capital Gains) 4 4 4 returns. These programs automatically and sell data, while others will include Projected Cash Flow 4 4 4 calculate the tax liabilities of your dividends and other transactions. Be transactions and report their impact aware, also, that these downloads may Customized Reports 4 4 on the rate of return of the securities not always be 100% accurate. Be sure Batch Reporting 4 4 and portfolios. to manually check the transaction lists 4 4 4 Alerts Programs that follow CFA Institute after importing to ensure accuracy. Performance Security/Industry/Asset 4 (security) 4 4 (security/asset) Global Investment Performance Stan- For this comparison, we download- Reports Portfolio (Single/Multiple) 4 4 4 dards (GIPS), formerly AIMR-PPS, ed data from Scottrade and E*Trade Holding Period/Between-Period Returns 4 (holding period) 4 4 adhere to the accounting and presenta- to the programs that allowed OFX Value-Weighted IRR/Time-Weighted Returns 4 4 4 (value-weighted) tion standards established by the CFA imports. Transaction lists were then Tax-Adjusted Returns 4 4 Institute. These include: calculating a compared to Scottrade and E*Trade Benchmark Comparison 4 4 4 total rate of return, providing year-by- account statements. Typically, the Follows GIPS Standards 4 year rates of return, and allowing for Scottrade import included accurate Data Support Data Services Supported Internet Internet Quicken consideration of portfolio management buy and sell data, but dividend data Imports Brokerage Transactions* OFX, QFX OFX, QFX costs (for more information on GIPS, was hit or miss. E*Trade, on the other visit www.cfainstitute.org). hand, had a better track record with Import Formats Supported* CSV TXT, Captools OFX, QFX dividend data. Neither offered per- Export Formats Supported* ASCII, CSV ASCII, XLS, HTML ASCII, XLS, PDF Data Support fect imports every time. Depending *Key to import/export formats: Open Financial Exchange – OFX, QFX; Quicken – QIF, PRN; Comma-Separated – CSV; Text File – TXT; Excel – XLS; ASCII; HTML – Internet Browser It is common for portfolio man- on the broker you use and types of

July/August 2007 15 When falling in love with a program BetterInvesting Portfolio Manager 5 that has extensive coverage, remember that a longer learning curve will most likely be involved. No area of analysis warrants getting a demo more than portfolio manage- ment. You can check out the program’s interface and consider how easy it is to maneuver around in the program. Few demo versions come with written instructions, so browse the Web site for any help files and try E-mailing questions to the vendor’s technical support staff to test them for possible future reference.

The Programs

BetterInvesting Portfolio Manager Previously called NAIC Portfolio Record Keeper and a top pick once again, the BetterInvesting Portfolio Manager securities and transactions you have trade-off between a simple, easy-to-use is a comprehensive portfolio manage- in your portfolios, your experience interface and a strong set of portfolio ment tool. You can track an unlimited with importing data directly from a management and analytical features. number of portfolios and an unlimited broker will vary. The more advanced programs seem to number of securities in each portfolio. Some applications will also allow bring along an extensive interface with Securities handled include the typical you to import and export data from their highly evolved skill levels. cash, stocks, mutual funds, ETFs (ex- Quicken (QIF or PRN formats), as a When considering how easy the change-traded funds) and options, as comma-separated file (CSV), a text file program is to learn, also consider how well as preferred stock, government (TXT), or an Excel file (XLS). easy and quick it is going to be to per- and agency bonds, and tax-exempt Finally, because of the popularity of form your normal maintenance tasks, bonds. The program handles transac- Captools and its recent discontinua- such as entry of purchases and sales tions associated with these securities tion, we noted the programs that have and the reinvestment of dividends. including purchases and sales, various the ability to import transaction data from Captools. While it may be set up to be as easy as a click Fund Manager Personal 8.5 of a button, as BetterInvesting promises for the near future, you might encounter a complicated process. Either way, for Captools users, the ability to import the data is invaluable, especially for those with extensive trading and transaction histories. For more information on this, see the box on page 10.

Ease of Use The great intangible aspect involved in selecting a portfolio management program centers around how easy the program is to use. In general, there is a

16 CI types of dividends, spin-offs, mergers and dividend reinvestment plans. Investor’s Accountant 5.2.28 This latest version of Portfolio Man- ager has over 35 reports, 15 more than reported in our last comparison two years ago. You can see your portfolio’s current value, unrealized gains and losses, income received, capital gain distributions, commissions paid, port- folio allocation and diversification, cash flow projections, performance measurements, asset maturity sched- ule, transaction and tax-related reports. Reports can be customized and run in batches. Both value- and time- weighted returns are calculated in CFA Institute compliant methodologies. One drawback to the program is that Portfolio Manager offers the ability to download from only 12 financial insti- tutions via OFX and QFX. However, some of the most popular brokerage firms are included, so a number of in- vestors will be able to use that option. manually, a process that is simple but, reports and customization capabilities Portfolio Manager offers a wizard to for investors with large portfolios and to fit any investor’s needs. Investors assist with transaction imports, mak- extensive transaction histories, may be of all levels will find that monitoring ing the process relatively easy. Imports, time consuming. and analyzing their portfolios with this however, were not always accurate Portfolio Manager also offers port- program is not only easy and highly and a few discrepancies were found folio alerts based on various price and intuitive, but can also be a pleasant in our test samples using Scottrade volume targets. experience. and E*Trade. BetterInvesting’s Portfolio Manager Transactions can also be entered is easy to use and provides a wealth of Fund Manager Fund Manager from Beiley Software comes in three versions: Personal, Pro- Microsoft Money Premium 2007 fessional and Advisor. The Personal version is geared toward the individ- ual investor and offers basic portfolio management tools and performance reports, while the Professional version has more advanced statistics, techni- cal analysis functions and portfolio alerts. The Advisor version is aimed at professional investment advisors. Each program handles an unlimited number of portfolios, with up to 500 securities in each for the Personal and up to 2,000 securities in each for the Professional. Since our last update, Fund Man- ager can now track ETFs, futures, and user-defined securities in addition to cash, stocks, mutual funds, bonds and options. The standard deposit, withdrawal, and buy/sell transactions are handled

July/August 2007 17 The program is not as easy to use Option Money 7.0 as some of the others in the compari- son, nor is it very attractive, but the Investor’s Accountant allows for an unlimited number of portfolios and securities in each portfolio as well as over 20 reports. Investor’s Accountant also handles a wide range of securi- ties and transaction types including warrants, and real estate as well as user-defined securities. You cannot import transactions from a brokerage firm and entering them manually takes some getting used to. The program has a wizard that takes you through the process and also of- fers written instructions that pop up in a separate window the first time a function is used. The program has a few graphs, but displays most of its information in a Word document format. To view your current list of holdings or a transaction list, you must run a report. in addition to dividends, redemptions, For investors looking for more in- Reports can measure performance splits, mergers and spin-offs. Both long depth analysis, the Professional ver- between any two points in time or and short positions are also supported. sion may provide the right tools. you can choose from periodic intervals Another welcome improvement is the such as month, quarter or year. ability to account for commissions. Investor’s Accountant Automatic alerts can be set for divi- Transactions can be entered manual- Hamilton Software offers a variety dend reminders, option expiration and ly or imported from your brokerage ac- of financial management software op- price, and value and percent limits. count via OFX or QFX, from Quicken, tions that range from a simple program Overall, this program offers a good or from a text file or comma-separated that calculates a basic rate of return for set of analysis and performance cal- file format. Fund Manager provided a portfolio to a complete portfolio man- culation tools. It is not as intuitive the most accurate data import from the agement analysis system. Investor’s as other programs, but for investors two sample brokerage firm tests. Data Accountant is Hamilton’s offering for willing to overcome the learning curve, can also be imported from Captools a complete portfolio management and the program can prove to be a helpful (see page 10 for more details). analysis system. analysis and management tool. Fund Manager has 13 reports and allows you to customize timeframes. A custom report function also allows Portfolio Analyzer 4.0.22 you to choose from over 150 fields to create your own report. The capital gains reports can be exported to vari- ous tax reporting software. The Professional and Advisor ver- sions offer price alerts that can be based upon a fixed price, a trailing stop-loss or a moving average. Notifications are sent via E-mail, pop-up window or sound. Overall, the Personal version of the Fund Manager program is good for simple portfolio tracking and perfor- mance reporting and is one of the least expensive options in the comparison.

18 CI Table 1. Ratings of Portfolio Management Software

Criteria are rated on a scale of one to five, with five denoting the best score. Performance rates how well the program accomplished the typical functions required of a complete portfolio management program; Documentation rates the quality of the printed materials, on-line help/tutorials, and manufacturer support; and Ease of Use rates how simple the program is to install, learn and operate.

PerformanceDocumentation Ease of Use Price Pros Cons BetterInvesting Portfolio Manager 5 5 5 5 $169 +Captools converter soon –Imports from only 12 brokerage firms Quant IX Software +Easy to use www.betterinvesting.org +Straighforward display of holdings & performance Fund Manager 8.5 4 4 3 $69 (Personal) +Can import from Captools –Does not import broker transactions Beiley Software Inc. $295 (Pro) +Pro version includes –Limits no. of portfolios & securities www.beiley.com technical analysis tools The Investor’s Accountant 5.2.28 4 4 3 $249.95 +Offers over 20 reports –Not as intuitive as other programs Hamilton Software, Inc. +Handles a wide variety –Does not import broker transactions www.hamiltonsoftware.com of transaction types & securities –Reports can be difficult to read Microsoft Money Premium 2007 3 4 5 $79.99 +A complete money mgmt sys –As portfolio mgr alone, lacks Microsoft, Inc. +Strong integration w/Web site sophistication & flexibility www.microsoft.com/money +Straightforward display of holdings & performance Option Money 7.0 3 4 5 $345; +Ability to import from Captools –Limited performance reports Portfolio Systems, Inc. or $30/mo. +Handles a wide variety of www.scscompany.com transaction types & securities Portfolio Analyzer 4.0.22 4 4 3 $59.95 +Offers over 20 reports –Not as intuitive as other programs Hamilton Software, Inc. +Handles a wide variety of –Does not import broker transactions www.hamiltonsoftware.com transaction types & securities –Reports can be difficult to read Portfolio Director 8.0 5 5 5 $300/mo. +Ability to import from Captools Portfolio Systems, Inc. +Wide variety of perform reports www.scscompany.com +Easy to use Quicken Premier 2007 3 4 5 $79.99 (Premier) +A complete money mgmt sys –As portfolio mgr alone, lacks Intuit, Inc. $69.99 (Mac) +Straightforward display of sophistication & flexibility www.quicken.com holdings & performance

Microsoft Money through the Microsoft Money Web or at various times throughout the day. Premium 2007 site and the portfolio tracker mimics When testing the import function from Microsoft Money offers more than the Web site’s offerings. However, the various brokerage accounts, there were just portfolio management tools. The software offers additional reporting a few snags. After multiple attempts, program is designed as a money man- and analysis tools. the data was finally imported, but not agement tool as well as an investment You must create a Windows Live without much frustration and a little tracking and analysis system. You can ID before using the program because confusion. The imported data was set up a budget, track your spending, all of the data is stored on Microsoft highly accurate, minus a few round- write checks, plan for retirement and servers as opposed to your hard drive. ing errors. research potential investments. A After you have set up your ID, creating The securities that the portfolio detailed look at all of Money 2007’s portfolios and entering transactions is tracker handles include cash, stocks, functions can be found in the Janu- easy—Money provides wizards to take mutual funds, ETFs, bonds, options, ary/February 2007 issue of Computer- you step-by-step through the process. and real estate, as well as user-defined ized Investing. You can create an unlimited number of securities. Money even has the ability Money comes in three versions, portfolios with an unlimited number to account for employee stock options. Standard, Deluxe and Premium. The of securities in each. Tax data can be exported to various tax Premium version includes the portfo- Transaction data can be downloaded preparation software programs. The lio management tools and is geared from various brokerage firms and reports offer basic performance, asset toward investors. The program is run banks. Data can be updated each day allocation and capital gains analysis.

July/August 2007 19 techniques and capabilities. In Portfo- Portfolio Director 8.0 lio Analyzer, current portfolio holdings are shown only for the current date and performance is measured only for the time period that the security is held.

Portfolio Director Portfolio Systems Inc.’s Portfolio Director offers professional investors a system to track an unlim- ited number of client portfolios in one program. The program offers an extensive list of securities and transactions handled as well as a wide variety of performance reports. Aside from basic securities, Portfolio Director can ac- count for annuities, options, futures, warrants and various fixed-income investments. The program also handles buys, sells, margin, return of capital, cash and stock dividends, stock splits, You can also create custom reports. lacks a step-by-step wizard to assist interest and more. Overall, Money’s portfolio tracking new users. Instructions on import- As with Option Money, transaction system is straightforward and useful, ing can be found at the company’s data can be imported from various especially for those who wish to take Web site. In testing, Option Money brokerage firms and the downloads advantage of the additional money provided a fairly accurate import of are fairly accurate. management and financial planning transaction data. Because the program is geared tools offered in the program. The You can track an unlimited number toward professional investors, it has program, however, lacks sophisticated of portfolios and an unlimited number extensive performance and analysis reporting and portfolio analysis tools of securities in each. Option Money reports. It also carries a professional offered by other programs that are tracks a wide array of securities in- price tag of $300 per month. Reports designed solely for portfolio manage- cluding 14 different fixed-income include: return on investment track- ment. investments and futures on top of the ing and graphing, cash flow analysis, typical cash, stocks, funds, options ratio analysis and asset allocation Option Money and bonds. Transaction types include: graphing. You can also view histori- Portfolio Systems offers three portfo- buy and sell, return of capital, cash cal position reports showing asset al- lio management tools: Portfolio Gains, and stock dividends, splits, spin-offs, location performance. Annualized, Option Money and Portfolio Director. and interest. IRR and time-weighted rates of Portfolio Gains is a simple program Reports are limited to basic portfolio return are used to calculate portfolio that tracks stock, fund, bond and op- position and performance reports. The performance. tions trades and tracks gains and losses reports can be customized, exported User-defined benchmarks can be as well as Schedule D tax reports. to Excel or printed. Tax reports can be compared against portfolio returns. Option Money includes the features imported to various tax preparation Portfolio summary tables combine of Portfolio Gains and adds analysis software programs. performance tables, historical return and performance reporting to its list graphs and allocation reports for easy of features. Portfolio Director is geared Portfolio Analyzer reading. Reports can be customized, toward active traders and professional Portfolio Analyzer, the other Ham- printed, exported to Excel or down- portfolio managers and is discussed in ilton Software program in this com- loaded in PDF format. detail later in this article. parison, is a more basic version of the Portfolio Director may offer more Option Money can import trans- Investor’s Accountant. It handles the than some investors need, and a actions from a number of popular same securities and transaction types. price tag beyond some budgets, but it brokerage firms. While the process is Portfolio and transaction creation is includes a wealth of detailed reports not complicated, it is not as simple as identical as well. and analysis. This is our top pick for other programs and Option Money Differences arise in the reporting Mac users.

20 CI Quicken Premier 2007 Like Microsoft Money, Quicken of- Quicken Premier 2007 fers a complete money management package that includes portfolio man- agement and analysis tools. Quicken offers four versions: Basic, Deluxe, Premier and a Mac-only version. The Premier version includes portfolio management capabilities as does the Mac-only version. Quicken offers OFX downloads for over 5,000 banks, credit card companies and brokerage firms. A step-by-step wizard helps you import transaction data. As with Microsoft Money, importing transactions was not as smooth as with other programs; it took multiple tries before the data was successfully imported. However, imported data was accurate, with a few missing transactions. The 2007 version of Quicken no longer offers the ability to import data in the QIF format, but the Quicken Web site offers help on how to con- option plans are also supported. looking for portfolio management vert any QIF files to the OFX format, Various alerts can be set up, includ- alone. It is also one of the only options which offers faster and more accurate ing price and volume, tax and capital for Mac users in need of a portfolio downloading. gains and data update reminders. management program. Reports offered include performance, While Quicken offers basic portfolio asset allocation, capital gains, and risk. management analysis tools and re- You can customize reports and create a ports, investors interested in the entire Cara Scatizzi is associate financial toolbar for easy access to frequently used money management package may gain analyst at AAII. Ian McGregor provided reports. Additionally, employee stock more from the program than those research assistance.

July/August 2007 21