Investment Benchmarking when drip-feeding

Lennys_Shinpad

I have been investing in a range of unit trusts for last last 18 months and I want to begin benchmarking my portfolio against the FTSE All Share Index to test my strategy.

I would be able to do this easily if I had invested a lump sum and not more. The problem is that I am dripfeeding money every month and rebalancing whenever the proportions get out of kilter.

From what I understand, the correct benchmark for my portfolio would be what my money would have returned if I had invested my monthly amount into a FTSE tracker (or ETF) on the day as I buy my unit trusts. This seems like a time-consuming exercise to undertake.

Does anyone know of how I can easily create a benchmark under these conditions? I imagine it must be a common problem as lots of people drip-feed into pension funds and I assume that more than a handful of them would like to compare the performance to a benchmark. Is there a website I can use to generate a benchmark based on daily FTSE prices?

Or am I overcomplicating the complexity of this problem? Are there some trees I can't see for the woods?

Thanks,

James.

dunstonh

Many IFAs have software that will do that but I dont know of any free sites that will do it for you. If you find one, let us know

Linton

Lennys_Shinpad wrote: »

....
From what I understand, the correct benchmark for my portfolio would be what my money would have returned if I had invested my monthly amount into a FTSE tracker (or ETF) on the day as I buy my unit trusts. This seems like a time-consuming exercise to undertake.

Does anyone know of how I can easily create a benchmark under these conditions? I imagine it must be a common problem as lots of people drip-feed into pension funds and I assume that more than a handful of them would like to compare the performance to a benchmark. Is there a website I can use to generate a benchmark based on daily FTSE prices?

Or am I overcomplicating the complexity of this problem? Are there some trees I can't see for the woods?

Thanks,

James.

Suggest you download the FTSE all share historical data http://uk.finance.yahoo.com/q/hp?s=^FTAS&b=4&a=00&c=2000&e=2&d=11&f=2009&g=m
into excel. It should then be an easy calculation to determine how many hypothetical FTSE AllShares you would have bought each month, the current total, and thus the current value.

Lennys_Shinpad

Linton wrote: »

Suggest you download the FTSE all share historical data http://uk.finance.yahoo.com/q/hp?s=^FTAS&b=4&a=00&c=2000&e=2&d=11&f=2009&g=m
into excel. It should then be an easy calculation to determine how many hypothetical FTSE AllShares you would have bought each month, the current total, and thus the current value.

Cheers Linton,

I will download the data. I'm not too bad on Excel so I should be able to knock something out.

Sounds like the best way forward.

James.

Lennys_Shinpad

Downloaded the data and I have calculated that I beat the FTSE All Share (adjusted for dividends). Have it all nicely set up to update each month. Not too difficult really. Cheers for the tip.

Myrmidon_J

I like the Excel / FTSE All Share solution.

Another option - also using Excel! - would be to find a FTSE All Share tracker and analyse movements in its price. You could then calculate how many units you would be able to purchase on any given day, and compare to your own efforts.

Well done for beating the index - the genius of active management, eh?