Changing font size

You can adjust font size in Portfolio Lab. This control appears on the upper right of the Portfolio Lab window as “A-/A+” buttons:

kwanti Portfolio Lab

Portfolio Lab will remember your font size preference, so that you don’t have to set it again the next time you log in.


The problem with many performance charts

Performance information conveyed on return charts from many financial sources is misleading. Investors reading these charts will be unfairly biased against income-producing assets.

Learn how total return better represents an asset performance and enables meaningful comparisons. [PDF version]

 


Maximum drawdown and recovery

Previously, we explained how to visualize the maximum drawdown of a portfolio, a volatility measure that is intuitive for most investors.

The latest version of Portfolio Lab is enhanced to also display the recovery from the drawdown. The recovery is the first day after the trough when the portfolio losses are recovered, as shown in green in the chart below:

Portfolio maximum drawdown


Volatility charts

To display a stock, ETF, or mutual fund volatility, bring up the Asset Profile view by clicking on the magnifier icon in the main portfolio table, as show below. The volatility chart is show at the bottom of the Asset Profile view.

 

The volatility is computed as the standard deviation of the last 50 days of returns. Consequently, the volatility chart show the rolling 50 days standard deviation.

Portfolio volatility

You may also chart the volatility of entire portfolios. To display a portfolio volatility, go to the Backtest view, return chart, and select volatility as shown below. The volatility chart appears below the portfolio return chart:

 

In this view, it is also possible to compare the portfolio volatility with a benchmark volatility. Simply use the Backtest compare function to add the benchmark volatility to the chart.

 


Optimization controls

Portfolio optimization is sensitive to the choice of input parameters. Portfolio Lab provides a set of default assumptions based on a simple forward model as a starting point. We recommend that you review these assumptions and adjust them to match your constraints and views.

In the latest release of Portfolio Lab, min/max weights constraints are editable directly on the assumptions table, as shown in red:

 

 

In addition, you may edit the expected returns by either:

  • providing your estimate, directly on the table as shown in green
  • changing the capital market expectations used to calculate expected returns: risk-free rate, equity risk premium

For more information please refer to Portfolio Lab’s user manual.