How to Read Your Quarterly Reports

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Hi, my name is Erica Yount and today I want to talk to you about your Quarterly Investment Report and why it’s important to open it up and look at it. And I just want to highlight some of the key areas on the report.

So, to get started, to access report, you’ll log into your Modera hub and then click on documents.

And on the left-hand side, you’ll see a folder, titled Quarterly Reports, click on that, and just go ahead and open up the most recent ones.

So here is your quarterly report. Now on the first page, you’ll see your allocation between bonds, which are your fixed income and stocks, which are your equities. And so for this sample client, you can see that they’re allocated roughly 50% to bonds and 50% to stock.

So you just want to eyeball that and just make sure it’s allocated for your investment policy statement. And you come down here and you can see how it’s been allocated over time. So, it’s hard to see how it’s allocated on that particular day, but it’s also nice to see allocation over time. And so you can see through this chart that the green area are your bonds and bond like categories, and the blue area is your stocks, stock-like categories. And you can just make sure that your allocation has been consistently in line with your expectations.

On this page, you can see your invested value over time. So the gold line represents the money that you have put in or withdrawn from your account over time. And then the blue line represents your invested value over time.

And then really the chart below it just quantifies that in terms of dollars. So you can see over various time periods, the amount of money that you put in, additional contributions, ending value and the dollar amount of investment gained.

This also shows you your portfolio IRR, which is internal rate of return and your portfolio TWR, which is your time-weighted rate of return. And as you can see these two numbers, they’re fairly consistent or usually pretty close. The difference being that IRR also captures that influence of timing of contributions and withdrawals. So for instance, if you put in a large contribution and then the market greatly appreciated right after that, that’s going to impact your IRR and make that return look a little bit better. And the TWR, time-weighted return, it just removes the influence of timing from return.

Okay, and then here you can see your asset class performance over various timeframes as well. And so one thing that’s useful as you can see, for example, what are you allocated towards US equities and how did that do over different time periods relative to a benchmark that’s applicable?

So for instance, here we have the Russell 3000, which is a large cap US benchmark, and here I would also encourage you to go ahead and look at your hub for performance as well, because you’re going to see various additional benchmarks there because it’s quite likely that you’re not just invested in large cap US stocks.

You’re probably also invested in a portion of small caps and some value stocks. And so you can see the relative performance index is over there as well. And so that’s pretty helpful.

All right then finally, we just have a listing of your accounts. You just see, okay, which accounts are invested here with Modera and then what are my largest positions? And then I don’t think I want to point out is a lot of clients say, well, how is this different than my custodial report through say, Fidelity or Schwab? And that those reports do a great job of capturing your transactions and your dollar amounts, but they don’t include performance.

I would encourage you to go on your hub and look at your quarterly reports to also review your performance and your allocation.

We hope you found this overview helpful, and if you have any additional questions about your quarterly report, please do not hesitate to reach out to your wealth management team, thank you.