The Complete Guide to Portfolio Management Software

As do it yourself investors, keeping track of a portfolio’s performance using portfolio management software is critical. Making sure that the portfolio’s performance is what it should be is step one. Step two is tracking the portfolio’s asset allocation to know when changes should be made; the target asset allocations are not where they should be so rebalancing is required. Finally, step three is making sure that any additional fees are not eating into profits.

Robo advisors complete all the tasks that standard portfolio management software packages are designed to do. By completing all the above steps completely online, and using proper financial management processes as well technology to keep costs low, the management of a portfolio is completely automated.

The Best Portfolio Management Software Packages

If using a robo advisor is not what you are looking for, then you are going to need some method of managing and tracking your investment portfolio. As mentioned above, and at a minimum, you need to be tracking the performance of your portfolio as well as the monitoring your asset allocation. You will need to make adjustments if your asset allocation gets out of line as well as watch to make sure that the performance of the portfolio is what it should be. For example, if you are not meeting the performance of the markets that your exchange traded funds are designed to follow, then you should consider moving to a fund that does.

If you are not going to have all of this done for you automatically by a robo advisor, then there are some options that you can consider in terms of stand alone software packages or other online services.

The following are a few of these packages that you may want to consider.

Fund Manager Portfolio Management Software

The Fund Manager Portfolio Management Software packages is designed to be a professional level package that completely tracks and manages a portfolio using a number of key features that will give the investor insight into how the portfolio is performing.

It is available in Personal, Professional, and Advisor editions. The Advisor edition is intended for investment management professionals who look after multiple client portfolios. This version will not be applicable to most individuals.

However, if you are interested in this software package we encourage you to look into the professional version as it provides a more robust suite of tools than the personal edition. Here are the key features available with Fund Manager Portfolio Management Software:

  • Track stocks, funds, options, bonds, and other investment products
  • Powerful graphing
  • Extensive reports
  •  Capital gain calculations
  • Track investments based on FIFO, AVG, or Specific Lot purchases
  • Wash sale support
  • Export to tax software
  • Yield calculations (GIPS/AIMR compliant)
  • Technical analysis
  • Retrieve prices from the internet
  • Retrieve transactions from broker/fund
  • Trailing stop loss alerts
  • Import from Quicken, Money, or text
  • Bond calculations/income schedule
  •  Multi-currency support

Here is an example asset allocation graph from the reporting features available within the tool:

Robo advisor software tool

Investment Account Manager

Investment Account Manager is a portfolio management software package that provides a centralized portfolio platform for stocks, exchange traded funds, options, bonds, mutual funds, and cash to improve investing results. The company has been providing portfolio tools for over 30+ years.

They offer both an individual version as well as a professional version which is intended for financial advisors supporting multiple clients. The individual version includes the following quite of tools:

  • Manage Single or Multiple Portfolios
  • Accurately Track Security Cost Basis
  • Comprehensive Reporting and Graphing Tools
  • Asset Allocation and Rebalancing
  • Rebalance Portfolio Targets Showing Absolute and Relative Divergence
  • Benchmark Comparisons: Monthly, Quarterly, Annually
  • Utilize Fundamental Ratio Analysis Tools
  • Ability to Download Investment Activity from Popular Financial Institutions

Here is an example of an allocation rebalancing report available that can help investors know when rebalancing activities are required:

Robo advisor software image

Quicken Premier 2017

Quicken has been offering customers personal finance and investment tracking products for years. Designed for the retail investor, it is definitely the easiest to use and consumer friendly product.

  • There are a number of different versions of Quicken available, however in order to get all the features required to track investments and portfolios, Quicken Premier must be purchased. When upgrading to this versions of Quicken’s portfolio management software, customers get access to the following features:
  •  Helps you plan for retirement
  • Portfolio X-Ray
  • Shows performance vs. the market
  • Helps with buy/sell decisions
  • Displays up-to-date portfolio value
  • Tracks cost basis and capital gains
  • Powerful mobile app, which included investment tracking, offline use, and enhanced search
  • View your net worth
  • Here is what the portfolio x-ray features looks like as a screen shot from right within the portfolio management software. You will also notice is provides an assessment of your portfolio based on risk level so that you can test that with your assumptions to make sure you are not invested in assets that are too risky for your needs.

Robo advisor software tool image

Owl Software’s Personal Portfolio Manager

Owl Software’s Personal Portfolio Manager software allows users to set up and manage up to 999 portfolios with an unlimited number of securities. With the ability to brokerage accounts, plan for retirement and conduct “what-if,” technical and trend analysis on the data within their portfolios, the software provides powerful analytics to help make better investment decisions.

With this portfolio management software, investors can manage and track portfolios consisting of stocks, bonds, closed-end funds, mutual funds, cash accounts, physical assets (i.e real estate), liabilities and options (puts, calls, and option combinations. In addition to this, the software package also includes a full charting package to analyze stock price movement.

Robo Advisors are Better Alternatives to Portfolio Management Software

All of the above software packages are good alternatives if you are true do it yourself investor. However, they all have their limitations and do nothing to automate the investment process. The output of each portfolio management software package is simply reports that provide a snapshot of what your portfolio is doing at that time.

They do not actually make the changes to your portfolio.

Robo advisors on the other hand provide most of the features included with even the best portfolio management software package, but also take care of all of the investment decisions for you. If you compare robo advisors as closely as we do here, you will see that many of them offer a comparable quite of common services. The difference is often in the implementation of these services; however, all the most common requirements of investors are met.

Estimating Future Returns – One Area Robo Advisors Can Help and Portfolio Management Software Cannot

It is impossible to fully predict future returns. There is no crystal ball that will be able to tell you what a specific portfolio or asset allocation is going to be able to generate in terms of returns.

However, robo advisors do have a leg up on stand alone portfolio management software packages when it comes to estimating future returns. With a robo advisor like Betterment for example, they take a number of key actions to estimate the returns a portfolio may be able to generate. The key benefit is that they will be able to tell you if the actions you are taking today with your portfolio will generate the required portfolio ending value to meet your goals. How do they do this? Here is a summary from their website:

  • We use a return estimate for the specific portfolio you select, for each goal. For example, our estimate for a 90% stock portfolio is different than that of an 85% stock portfolio. This estimate is based on the specific asset classes that you actually hold.
  • We consider volatility in our returns estimates. This allows us to produce the range of returns you see on the Advice tab, and also allows configuring the chance of success of our models. For example, our savings estimates assume a somewhat conservative 40th percentile outcome (60% chance of success) rather than the simple average (a 50% chance of success).
  • The return we assume is based on risk-free rate and an asset premium. The “risk-free rate” (which is the return a risk-free asset such as a U.S. Treasury bill will return), and an equity (or bond) “risk premium” or excess return, which is how much we expect risky assets like stocks and bonds to return in addition to this risk-free rate.
  • We assume risk-free returns vary over time. You probably know that interest rates (set by the Fed via its U.S. Treasury buying-and-selling program) are low right now, and most economists expect them to rise. The returns of each stock or bond fund in your portfolio are expected to be in addition to the safe or “risk-free” Treasury rates. So when rates rise, so should our expectations of your returns. Our projections assume these will increase from their low now to more normal rates in the future. Also, we make the typical assumption that longer-term treasuries have higher returns than short-term, due to the added interest rate risk they contain.

There is no all in one portfolio management software that can provide this service. Traditionally, only expensive investment management companies have been able to offer these features. However, with robo advisors like Betterment, they are able to provide this level of analysis and academically sound practices to build a portfolio that has a higher probability of meeting your needs. The outcome is improved performance and a portfolio that is able to beat the market:

Summary: Use Robo Advisors as Your Portfolio Management Software

There are a number of different portfolio management software packages available if you are a true do it yourself investor. Each of these packages take a slightly different approach, however they all are able to keep track of all of the details of your portfolio including managing your asset allocation.

However, there is a much better alternative to these software packages. The alternative is to simply sign up for a robo advisor service and let that company provide you with all the required tracking, performance monitoring, and reporting you need. In addition – and this is something these portfolio management software packages cannot provide – you get all of your investments completely automated and managed for you.