Bsealerts performance report provide an easy way to track portfolio performance in terms of returns generated. It provides yearly and cumulative annualized CAGR(%) returns which gives useful insights into individual's portfolio performance.
CAGR % - Annuallized growth rate over the given period.
Avg. Invst. - Annualized investment over given period.
Profit - The growth in value of investement over given period.
Other common ways to track portfolio are.
Extended internal rate of return is a measure of return used for multiple investments.
The problem with XIRR is it assumes the profit generated out of investment is reinvested with same rate of return which is not true.
Upon investment of 100Rs for 1 month you generate 10Rs profit so the annualized return should be 10% * 12 = 120%, but if you calculate XIRR it will give returns as 208% which is not true for calculating portfolio returns because XIRR assumes that 10Rs profit generated will again fetch same rate of return.
2. NAV method
In this method we calculate the net value of assets and divide it by number of units to get NAV per unit value. The NAV per unit value changes as the valuation of asset changes. For every new transaction units are added or removed based on transaction nature and transaction value. The problem with NAV method is that the amount of money invested is not taken into account to calculate returns. There might be period when you have less money invested and some period where you have more money invested but due to nature of this methodology results can be skewed from actual numbers.
Assuming initial NAV of 10 we start with 1,000Rs as initial investment so number of units = 1,000/10 = 100.
In 6 months the value of assets become 3 times that is 3000Rs so NAV becomes 3000/100 = 30.
Now we invest 30,000 Rs more so new units allocated are 30,000/30 = 1,000
At this point total units = 1,100, NAV per unit = 30, So NAV = 30*1100 (33,000), total money invested till now = 1000+30000 (31,000)
After a month the value of assets reduce by 50%
So NAV per unit = 15, NAV = 15*1100 (16,500)
Note here that the invested amount 31,000Rs becomes 16,500Rs but the NAV grew from 10 to 15 so it appears that the investment did a CAGR of 50% but actually the investment was in loss. This is because when investment grew 3 times the amount invested was less compared to other period.
For every purchase and sell of stock use buy stock and sell stock options respectively.
Enter the date on which transaction was executed, choose company name or id and enter quantity and price per stock. In case you wish to add brokerage or other charges in your transaction adjust it in price per stock accordingly.
In case of stock split, bonus or reverse stock split enter the actual price of stock on transaction date. Do not adjust the price for stock split, bonus or reverse stock split.
Note : Short sell type transactions are not allowed. That means you can add a sell transaction only if you had entered buy stock transaction earlier and you are holding the required stock quantity. For short sell type transactions please choose add profits or add losses transaction type and enter the amount of profit or loss you made.
Add stock or remove stock options are used when you add or remove stocks from portfolio but you have not paid any price for the stock.
This generally occurs when you receive additional stocks during stock split or bonus. Similarly remove stock occurs generally during reverse stock split.
After choosing Add/Sell stock choose date, company and quantity of stock.
If you want cash you are holding to be considered in calculating CAGR returns use add cash units when you want to add cash to your portfolio or remove cash units when you want to remove cash from portfolio.
To add any external profit or losses like dividends, intra-day gains/losses, F&O gains losses or any other type of transaction where you have incurred profit or loss choose add profit or add loss option.
While entering the buy transaction for stock enter the actual price at which the stock was bought and quantity. Do not adjust price for split or bonus or reverse split.
Later when the stock was split or reverse split choose add or remove stock respectively and enter the quantity which was issued.
There can be various reasons for this.
a. Some error occurred in calculation due to some back-end issue.
b. Transactions entered might not be valid to generate report.
c. Some issue with historical stock price data.
In case you are not seeing performance report please send us email to firstname.lastname@example.org from your Bsealerts registered email id and we will look into it.