Portfolio Analysis Report

Portfolio Analysis

It is useful to analyze portfolios under the following circumstances:

  • How is your portfolio likely to perform? Does it comprise stocks that are overvalued? What about their growth prospects e.g. earnings growth, dividend growth?
  • Are you managing in line with your investment objectives?

    If you are managing a value fund, you would want to own stocks that are cheaper than the market average. Yet over time, the price appreciation of your stocks may mean that it is no longer as attractively priced as before. Or the valuation of your stocks may be cheap but the earnings of those companies are expected to be much slower than the market, which could lead to a value trap and underperformance.

    On the other hand, if you are managing a growth fund, you would want the earnings growth of your portfolio companies to be higher than the market. However, earnings disappointments and downgrades may mean that the earnings growth of the companies are no longer what you had expected. Or you could be owning stocks with high earnings growth but at a valuation premium that is not justified.

  • How is your portfolio likely to perform vs. a benchmark? The comparison of your portfolio’s valuation and fundamentals vs. the benchmark will also help you to determine if it is expected to outperform the benchmark. We are able to work with either publicly available benchmarks or any customize benchmarks that you provide.
  • Are you thinking of investing in a mutual fund? It is more useful to study the manager’s top picks than read about how the manager invests from the brochure. For example, by analyzing a portfolio of a value fund’s top holdings, you would be able to tell if the manager is truly buying value stocks? Are the stocks he is buying stocks that are not only cheap but have growth potential? 

Example of Portfolio Analysis