Welcome to National Bank Direct Brokerage. Our video today will feature Wealthscope, a tool that can help you manage your portfolio by providing an analysis of your investment holdings.
Wealthscope will take a snapshot of your portfolio and provide an overview of your investments in five important dimensions: performance, downside risk, fees, income and diversification.
With this information you will have a complete picture of your portfolio. When it comes to investing it’s important to review your portfolio on a regular basis to see if any changes are needed or simply just to rebalance.
To sign-up for the paid subscription of Wealthscope you can click on the profile icon shown here. Once signed up the tool can be accessed via the Markets heading and then select Wealthscope from the dropdown menu.
The tool supports Canadian and U.S. stocks and Exchange Traded Funds and Canadian mutual funds. With just a few clicks you can receive a scorecard or grade for your existing accounts.
To analyze your entire portfolio, click on ‘‘Overview’’ or analyze individual accounts separately by clicking ’’Group accounts for analysis’’ and then check off the boxes of the accounts you want analyzed and click ‘’View Group’’.
Wealthscope can also be used to evaluate a potential portfolio before making any purchases. A virtual portfolio option is available that allows you to analyze, compare, modify and track with ease before making a trade with real funds by clicking on ‘’Manually Enter’’ which is located on the right hand side of the screen.
Once on this screen give your virtual portfolio a name and the type of account, the currency and save it. The next step is to start typing in the name or symbol of the stock or ETF or the mutual fund code and select the correct one from the list and then choose the number of shares or units that you want to hold. Repeat these steps until you have your desired portfolio. Once completed click on SAVE and your virtual portfolio is ready to be analyzed. Please note you can edit the holdings or delete the account at any time.
To go back to our account list section simply click My Accounts. Let`s go ahead now with an example by selecting the Canadian RRSP account and have it evaluated. We then click on ‘’View Group’’. Here we can see that the portfolio is 100% Equity. If we scroll down the page we have the top 10 holdings with some relevant information.
Next step is to click on ‘’Analyze’’ which is located in the upper right hand corner and we now have the Wealthscope scorecard and grade.
Please note that with a score of 80% or higher the grade is an A.
Right below we have the holdings and their respective allocation weights. By scrolling down I can view a hypothetical portfolio history compared to a benchmark or a stock market.
Moving back up the page let’s view the performance tab. Here we have key statistics as well as annualized returns going back several years. If you have questions about those ratios, place your cursor over the question mark to learn more.
Moving on, we have ‘’Downside’’ which measures different types of risks. The main point here is to see your portfolio’s ability to limit losses when there is a market downturn versus the benchmark.
Our next section concerns Fees, Wealthscope looks at the MERs of your ETFs and Mutual Funds and a weighted average MER is calculated for your portfolio. The lower the MER, the higher the score received.
Next, we have income which refers to cash dividends or distributions from a stock, ETF or mutual fund. Here we have a list of all the holdings with the trailing 12-month yield, and the weight of the holding. At the bottom of the screen, we have the weighted average yield of the portfolio. Please note a portfolio yield of 5% will receive a 100% score. If you aren’t an income focused investor, this rating can be removed from the analysis.
Our last category is ‘’Diversification’’, here Wealthscope is going to help you with that question, am I properly diversified. Here we have information on the correlation between holdings, the risk by asset class. The risk and return contributions by individual holdings. Quickly figure out which of your investments contributes the most return and least amount of risk.
Moving on we have the regions of the world that you are invested in and your global sector allocation and others.
As you can see, we now have a more complete picture of the current portfolio and can make better informed decisions about our portfolio.
Now depending on how your personal portfolio scored you might very well want to make changes but then you need to ask yourself how will my changes affect my portfolio? Could making these changes make things worse?
Wealthscope will be able to help with that part as well. By clicking the scale icon located in the upper left hand-side you could make a comparison between your current portfolio and a ‘’What if’’ portfolio.
Simply make the proposed changes to the ‘‘What if’’ portfolio. For example, you could rebalance your portfolio or sell a portion of a stock to lower its holding weight. Maybe you’d like to sell certain securities and replace them with others or lower a sector weight or increase another. Perhaps increase the portion of your portfolio invested outside of Canada, it’s up to you.
When done click on the compare button at the bottom of the screen and Wealthscope will score the simulated portfolio and present the data side by side with several key statistics and a hypothetical portfolio history comparison between them.
If you want to delve further, Wealthscope can also analyze the ‘’What if’’ portfolio for an in depth view. Quickly discover if the potential changes have improved your overall risk or diversification. If you aren’t happy with the results, go back and make changes and repeat the analysis.
This concludes the walkthrough of the Wealthscope tool. Whether you want to perform an occasional checkup on your portfolio or evaluate a potential one, Wealthscope can help you in managing your investments.
To sign up for the yearly paid subscription please click on the Profile icon, located in the top right hand side of the screen. Click on subscriptions and select Wealthscope from the list and follow the instructions.