The dictionary definition of a composite is a grouping of equities, indexes or other investment securities in a standardized way. An example would be the NASDAQ composite index which is a market capitalization-weighted grouping of approximately 3,000 common stocks listed on the NASDAQ stock market. FinFolio broadens this definition by allowing our advisors to compile groupings of accounts, rather than securities, that have specific and similar criteria in common so that a picture can be created that represents useful data points, like portfolio performance.
Composites are a welcome addition to FinFolio as it enables our users to more effectively market their services to prospective clients. With composites, an advisor can aggregate the performance of a group of accounts with similar characteristics and investment goals, such that the advisor can then report on their performance to similar prospective clients.
Setting up composites within FinFolio involves creating rule sets that determine which accounts are included in each composite, allowing for automated entry and exit of accounts to and from the composite based on AND criteria.
FinFolio composites also support automated change recommendations as market conditions fluctuate or rules are adjusted. This ensures that accounts continue to be associated with the correct composites for reporting accuracy. For further analysis, the composite change recommendations can be downloaded to a CSV file.
A summary chart can be exported with each new month or year, including these values:
- Period
- Gross-of-fees Return
- Net-of-fees Return
- Benchmark Return
- Number of Accounts
- Internal Dispersion
- Composite Assets
- Firm Assets
Composites is a great way for our users to market their services and provides a user-friendly means of accurately representing past performance.
