Portfolio Performance: 3 June 2011

Measuring Portfolio Performance

You cannot manage what you do not measure.  How true.  These portfolio performance data tables are all about portfolio management, measurement, and monitoring.  The table shown below does not include current updates for all portfolios tracked using the Captool software.  I plan to take care of that early next week.

Looking over the portfolios tracked by the TLH spreadsheet, which of the portfolio do you think is the best performer?  Is it the portfolio with the highest Internal Rate of Return (IRR)?  If so, the Kepler wins the top spot.  Two portfolios to omit from consideration are the Franklin and the Kenilworth as both are too young to be included.  If one is looking for a portfolio that matches its Strategic Asset Allocation (SAA) plan, then look to the Schrodinger as the ITA Index is zero.  Portfolios that come close to matching their ITA Index are following the SAA plan.  The Newton, for example, is falling behind this benchmark.

Other investors will look to see which portfolio outperforms the VTSMX benchmark.  The Bohr, Curie, and Einstein portfolios show up quite well against this standard.  Other metrics to seriously consider are either the Sortino or Retirement ratios.  Since the Retirement is the higher hurdle, the winner is definitely the Einstein portfolio with a reading of 5.0.

Let's focus on the Franklin portfolio for a moment.  This portfolio is named after Rosalind Franklin, of DNA fame, and Benjamin Franklin. This portfolio came with a number of assets already in place so the portfolio was not built from scratch using one of our Strategic Asset Allocation plans.  The reasoning was to let this portfolio run through the first quarter of 2011 so all bond dividends would be paid out.  Also, a two month span would provide a brief glimpse into the performance of the pre-defined asset plan.  One can see how the portfolio performs against a benchmark such as the VTSMX index fund from Vanguard.  So far, the results are not positive.  Please keep in mind that IRR values vacillate wildly over short periods so large percentage changes are not of great concern.  Should these continue, then it would be a problem.  If the numbers do not improve over the next month, this portfolio will need an overhaul.

Portfolio Performance - 06/03/2011

Portfolio Last Update Launch Date Tracking Tool Port. IRR ITA Index Diff Port. vs. ITA Index VTSMX IRR Diff. Port. vs. VTSMX Index IR SR RR
AA-Mosaic 05/31/2011 07/21/1999 Captool 3.0% NA NA 1.6% 1.4% 0.05 NA NA
Curie 06/03/2011 12/26/2007 TLH SS 5.8% 0.7% 5.1% 1.7% 4.1% NA 12.4 1.9
Mosaic2 05/31/2011 07/19/1999 Captool 5.2% NA NA 1.42% 3.78% 0.16 NA NA
Newton 06/03/2011 06/02/2008 TLH SS 9.9% 12.9% -3.0% 7.8% 2.1% NA 1.5 1.5
Passive Port. 05/31/2011 12/01/2000 Captool 5.61% NA NA 3.3% 2.3% 0.70 NA NA
Schrodinger 06/03/2011 12/01/2000 TLH SS 5.3% 5.3% 0.0% 3.3% 2.0% NA 4.2 0.3
Jane 05/31/2011 02/14/1997 Captool 9.45% NA NA 4.92% 4.5% 0.54 NA NA
Einstein 06/03/2011 06/30/2008 TLH SS 14.7% 17.3% -2.4% 11.2% 3.5% NA 5.0 5.0
Gauss 05/31/2011 02/19/1997 Captool 9.58% NA NA 4.89% 4.69% 0.23 NA NA
Kepler 06/03/2011 11/01/2008 TLH SS 19.5% 22.2% -2.7% 19.4% 0.1% NA 0.09 0.09
Scrappy 05/31/2011 08/14/2008 Captool 13.64% NA NA 6.1% 7.51% NA NA NA
Bohr 06/03/2011 08/14/2008 TLH SS 12.8% 13.2% -0.4% 6.1% 6.7% NA 3.6 3.6
Kenilworth 06/03/2011 08/18/2010 TLH SS 16.3% 20.0% -3.7% 22.6% -6.3% NA -0.04 -0.04
Franklin 06/03/2011 05/6/2011 TLH SS -36.7% -16.8% -19.8% -19.9% -16.8% NA -0.20* -0.20*
Projects 05/31/2011 12/01/2000 Captool 5.84% NA NA 2.01% 3.83% 1.33 NA NA
Washington 05/31/2011 06/18/1999 Captool 3.32% NA NA 1.72% 1.6% 0.28 NA NA
Maxwell 06/03/2011 12/25/2000 TLH SS 1.0% 9.4% -8.3% 4.6% -3.6% NA -0.19 -0.19
Adams 05/31/2011 06/18/1999 Captool 3.71% NA NA 1.72% 1.99% 0.72 NA NA
Euclid 06/03/2011 06/30/1999 TLH SS 2.8% 9.5% -7.7% 4.7% -2.9% NA -0.15 -0.15
Jefferson 05/31/2011 06/13/2006 Captool 6.47% NA NA 1.0% 9.79% NA NA NA
Madison 06/03/2011 03/13/2008 TLH SS 6.1% 14.0% -7.9% 9.7% -3.6% NA -0.15 -0.15

Since the last update nine of the eleven portfolios tracked by the TLH Spreadsheet software gained ground against either the VTSMX or the Sortino and Retirement ratios.  Despite the down week for the market in general, these well diversified portfolios did better than the market.