Keeping track of gains with cost averaging
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Plus I'm in one fund which helps lol. Although I kind of wish I hadn't looked. Paid in just over 16000 over the last 4 years and it's up 8000. That surely can't continue0
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Using a Morningstar transactional portfolio and looking at personal return may be worth a look as an alternative to a spreadsheet. See description at link below...
http://www.morningstar.co.uk/uk/help/faq.aspx?cat=7530 -
Try this in Excel:
=(((Current Value-SUM(Range of Cells with Investment Amounts))/Initial Value)-1)0 -
I think you can account for buying / selling fees etc when unitising by calculting the number of effective "portfolio units" bought or sold at the time the changes happen, and using the new number of units to derive the unit price going forward.
My understanding is that the percentage change in unit price/value is the number that represents the underlying asset performance because it takes account of the dilution and concentration effects that buying into and selling out of the account would otherwise have on a simplistic in/out performance value.
By calculating the number of 'investment' units at the current unit price involved in each transaction, the unit count and price maintain a consistent record of value at those points in time, from which a performance figure can be derived.'We don't need to be smarter than the rest; we need to be more disciplined than the rest.' - WB0 -
Yes, that would give your total gain over that period. However what this is OP is trying to work out is the true percentage gain when new money is added throughout the year. If for example, he had £10k invested at the start of the year and invested no other money during the year, and at the year end the value of his investment was £12k, his annual gain/profit is quite clearly 20%. If however he invested the £10k via various smaller instalments throughout the year, and at the year end the value of his investment was again £12k, his percentage profit would be higher than 20% as most of the money had not been invested for the full year. That is how I understand it.Fatbritabroad wrote: »Am I wrong that I've just added up my isa contribution I paid in over the last few years and subtracted it from the total in there?0 -
Yes, that would give your total gain over that period. However what this is OP is trying to work out is the true percentage gain when new money is added throughout the year. If for example, he had £10k invested at the start of the year and invested no other money during the year, and at the year end the value of his investment was £12k, his annual gain/profit is quite clearly 20%. If however he invested the £10k via various smaller instalments throughout the year, and at the year end the value of his investment was again £12k, his percentage profit would be higher than 20% as most of the money had not been invested for the full year. That is how I understand it.
If that is what the OP is wanting to know (and that is what I think they want but am not certain) then the XIRR gives the best measure of that.0 -
Fatbritabroad wrote: »Plus I'm in one fund which helps lol. Although I kind of wish I hadn't looked. Paid in just over 16000 over the last 4 years and it's up 8000. That surely can't continue
Who knows but the most important thing to do is look at the valuation of your assets now and consider how that could be affected positively or negatively by the future outlook.0 -
I think you can account for buying / selling fees etc when unitising by calculting the number of effective "portfolio units" bought or sold at the time the changes happen, and using the new number of units to derive the unit price going forward.
If you are unitising, there should be no change in unit price after a buy or sell; only a change in the number of units. You should include fees, as they are part of the cost of running the portfolio, i.e. the calculation of the reduction or increase in the number of units should include the fees.0 -
Unitisation is a method of measuring the underlying asset(s) performance.
It's not measuring individual portfolio performance, nor is it trying to, which is affected by all manner of activity, new money in, sales, fees, withdrawals etc.
The two can be almost identical, with no buying or selling, but never the same if platform fees are levied.
Unitisation can handle buying, selling, fees etc. It is intended for portfolios - essentially you are treating your portfolio as a fund.
Buy
Suppose you have 1000 units currently worth £1 each. You invest an extra £5000 in any fund which gives you 6000 units worth £1 each. Your total portfolio increases in value to £10000 giving you 6000 units worth £1.667 each.
Sell
You now sell £4000 worth of investments = 4000/1.667 =2400 units. So you have 3600 units left worth £1.667 each=£6000. Your investments drop in value to £5000. So each unit is now worth 5000/3600=£1.39.
Fees
You are charged £100 in fees so your investments are worth £4900 and each unit is worth 4900/3600=£1.36.
So if all this happened in a year your underlying return is 36%.0 -
So if all this happened in a year your underlying return is 36%.
If all that happened in a year the portfolio unit price would have risen by a rate of 36% pa, but for you to have got a 36% return on your investment everything would have to happened on the first day.
You can only calculate your rate of return if you know the dates of all your transactions.0
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