Principia Mutual Funds Advanced Module - Morningstaradvisor.morningstar.com/Principia/pdf/PrincipiaMutual...Principia Mutual Fund Advanced Module × Matt Eckstein, Training Manager

1

<#>

© 2009 Morningstar, Inc. All rights reserved.

Principia Mutual Fund Advanced Module

× Matt Eckstein, Training Manager

Agenda

× Investment Detail Report× Fund vs. Fund Report× Investment Comparison Report× Portfolio Mode Reports× Find Similar Fund× Creating an Investment Policy Statement

2

The Investment Detail Report

× Press <F8> to bring up the Find a Fund dialog box

× In the Find a Fund dialog box, type AIM Real Estate A

The Investment Detail Report (cont.)

× The fund is selected in Research mode

× Click View…PDF Fund Detail

3

The Investment Detail Report (cont.)

× The Investment Detail Report opens with the FINRA compliance materials included

Viewing the Fund vs. Fund (PDF)

× Compare any two open-end mutual funds

× In the Find a Fund dialog box, type T. Rowe Price Real Estate

4

Viewing the Fund vs. Fund (cont.)

× At the bottom of Research Mode, the status bar indicates 2 items have been selected

× Click View…Fund vs. Fund (PDF) to view the report


× The Fund vs. Fund report compares:× Performance× Fund Strategy× Morningstar statistics× Expenses

5


× The Fund vs. Fund report compares:× Equity Style Box× Portfolio Profiles

Viewing the Investment Comparison Report

× Select at least two investments from any managed product

× Choose up to four securities× Click View…Investment

Comparison Report

6

Viewing the Investment Comparison Report (cont.)

× Assign a benchmark × Customize the report pages


× In the search field, type iShares Dow Jones US

× Single-click iShares Dow Jones US Real Estate

7


× Alternatively, click the Find Investment icon and find securities by:× Investment Universe×Name, or ×Ticker


× From the Universe dropdown, select an investment type (SA)

8


× Type GMO, then click Go


× From the list of investments, click GMO Real Estate Strategy, then click Add

9

× Four investments have been added to the Investment Comparison Report dialog box

× To change the benchmark, click the Benchmark dropdown and find Idx: DJ US Real Estate TR USD



× Before generating the report, you can select which pages you would like to view, then click OK

10


× The Investment Comparison Report compares:× Historical Performance× Trailing Performance× Performance Analysis× Relative Performance


× The report compares:× Style and Sector Trails× Asset Allocation information

11


× The report compares:× Fair Value vs. Cost of Equity for ETFs× Morningstar Rating (for any investment with a rating)


× The report compares:× Expense Analysis graphs an investment’s expense compared to its Morningstar Category× Premium/Discount and trading costs are graphed for ETFs

12


× Tax Analysis breaks down an investments’ Capital Gains and Dividend distributions annually, for up to 10 years

Viewing Portfolio Mode Reports

× In Portfolio Mode, you can generate the FINRA-reviewed Snapshot Report and the Portfolio Comparison Report

13

Viewing Portfolio Mode Reports (cont.)

× Make sure you are in Snapshot View and a client and portfolio are open, then, click File...Portfolio Snapshot Report (PDF)


× The Portfolio Snapshot includes three pages of data and FINRA-reviewed compliance and disclosure

14


× On the second page, the Risk/Reward Scatterplot demonstrates the risk and return of a client’s portfolio compared to a benchmark

× Evaluate a portfolio’s consistency with the Performance History Graph


× For the Portfolio Comparison report, from Snapshot view, highlight a portfolio, then <CTRL>+click on a second portfolio

× Right-click one of the highlighted portfolios, then select Portfolio Comparison Report

15


× The Portfolio Comparison Report displays Composition, Style and Sector analysis for the two portfolios


× Regional Exposure, Trailing Returns and Risk Measures are also displayed on the report

16

Using the Find Similar Fund Tool

× The Find Similar Fund tool is accessed from any managed product universe in Research Mode

× Type Vanguard Small Cap Index in the Find a Fund dialog box, then click OK

Using the Find Similar Fund Tool (cont.)

× The investment is highlighted in Research Mode

× Click the Find Similar Fund icon to launch the tool

17


× The Find Similar fund window appears

× It displays similar securities across the managed product universe

× You can limit search criteria and select investment types

× Click the Search button to view the results


× You can also:× Export× Generate an Investment Comparison Report× Find similar securities to another investment

18

Presentation and Sales Materials

× The Hypothetical Module is launched from Portfolio Mode

Presentation and Sales Materials (cont.)

× Step 1 - Security Selection× From the Select dropdown,

choose an investment universe

19


× In the Find field, type the ticker or investment name

× Click the Add button to add investments to the securities list


× Step 2 - Choose a Time Period× From the dropdown, select

Trailing 3yr× In the lower left hand corner,

click Apply to All to apply the same time period to all of the investments

20


× Step 3 - Setting an Initial Investment

× You can alter the dollar amounts or shares, or accept the default amount of $10,000 per holding

× Decide whether to reinvest dividends and capital gains


× Step 4 - Subsequent Investments and Withdrawals

× Investments or withdrawals can be assigned following the initial investment

21


× Step 5 - Deducting Plan Fees from the Illustration

× Asset-based fees or sales fees can be applied to investments in the scenario

× In the Annl Fee field, type 1.00, then click the Apply All button in the bottom-right corner of the screen


× Step 6 - Rebalancing or Transferring Investments

× You can rebalance or transfer investments in a portfolio, but not both

22


× Step 7 - Choosing the Report Options

× On this step you can:× Edit tax information× Specify whether to use a benchmark× Decide how much performance information to display× Include other report material

× Click Generate Report to view the output report for the hypothetical scenario


× Hypothetical Portfolio Illustration can compare the hypothetical portfolio to a benchmark

23


× The Illustration details returns for the investments in the scenario


× The Presentation and Education Module is a FINRA-reviewed library of 20 PowerPoint presentations, PDF brochures, and advisor continuing education material

24


× Investors Brochures range from three to six pages and address retirement risks for investors


× Sales Ideas are also available in PDF format

× They can be printed and distributed, or sent to clients in electronic format

25


× The Education section provides advisor continuing education materials

× Other Resources includes FINRA-reviewed material disclosure

Investment Policy Statement

× The IPS Generator allows the advisor to define and document goals, risk, and an approach to a financial plan.

26

Investment Policy Statement (cont.)

× In the Goal section, enter agreed upon client goals.


× In the Associated Parties tab, select a Classification from the drop-down.

× Also, enter demographic information for the Associated Party.

27


× In the Risk Tolerance tab, select Risk Level and Assessment Method.

× Optional notes can be entered.


× In the Financial Constraints section, enter details regarding the client’s tax and liquidity constraints.

28


× In the Proposed Portfolio section, enter the target allocation for each asset class.

× Optionally, you can enter Allowed Range Bottom %and Top % for each asset class.


× In the Portfolio Securities step, you can decide which asset classes to include or exclude from a client’s portfolio.

29


× In the Portfolio Monitoring section, you can define the frequency with which the asset allocation and portfolio implementation will be reevaluated.

× You can also determine the criteria for reevaluation.


× In the Report Settings section, you can generate the IPS Report.

× You can also Edit the Cover page for the IPS Report.

Documents

Principia Mutual Funds Advanced Module - Morningstaradvisor.morningstar.com/Principia/pdf/PrincipiaMutual...Principia Mutual Fund Advanced Module × Matt Eckstein, Training Manager