Track your portfolio for free

PORTFOLIO POINT: A review of five free portfolio management tools finds one standout, and some puzzling features.

Studies show that people who use the bathroom scales regularly are more likely to achieve their weight loss goals than those who don’t. Investing is much the same. Those who are able to accurately track the performance of their portfolio are more likely to be better investors.

About two million Australians use platforms operated by the banks and other big financial companies to buy and sell stocks and funds. While these are quick to offer you a margin loan or a cash management account, they rarely allow you to track the cost of commissions in your bottom line, delivering an inaccurate overview of your performance.

Some investors choose to use dedicated (but expensive) software solutions such as Quicken, while others prefer the even more comprehensive approach that only a customised spreadsheet can offer. But the needs of many investors can be met with any one of the numerous free portfolio management tools offered by finance specialists and media companies.

Of course there are some concessions to make. Share data presented by the free tools is delayed by at least 20 minutes, sometimes longer. The more security-conscious among us might also fear that the providers of those free tools might use our portfolios to build an investor profile and sell it to advertisers, although I’m yet to be offered a stake in a time-share apartment.

To find the most accurate and easy-to-use portfolio management solution, we’ve road tested five free applications by entering a mock portfolio into each and comparing the results. Each tool has its strong points, but there can be only one winner.

Google Finance
www.google.com/finance

Google Finance is a relatively new addition to the online finance resources now available to investors ... and it shows. The platform was built for the US market and has been adapted for Australia. Entering your transactions individually is tiresome enough without having to add the prefix “ASX:” to each one.

Additionally, a discrepancy in the bottom line of our mock portfolio of just a few dollars in the total return proved infuriating until we noticed that it couldn’t handle half-cents on securities priced between $1 and $2, although it could do so 1¢ and 99¢. Go figure.

Its one saving grace is in its approach to news. Google’s search engines are continually identifying and collecting news stories that are relevant to the stocks in your portfolio. Overall, Google Finance is let down by its rudimentary approach to design elements, which makes it feel cheap and clunky. Just because it’s free doesn’t mean it has to look like it.

Tradingroom
www.tradingroom.com.au

The Fairfax-owned Tradingroom combines an adept share portfolio tracking application with the expertise of its managed fund offshoot Investmart. The result is an adept, if somewhat clunky, solution to monitoring investment performance across a range of investment types. Special mention must be made of the ability to view the course of sales or each and every transaction performed in a stock over a single day.

Data is presented in a fashion that is easy to digest and the user can adjust the format of the display to see those values they feel most important to them, such as price/earnings multiples, dividend yields, trading volumes and so forth. One omission: it fails to express total return as a percentage figure, using dollar figures instead. Nor does it offer group holdings of the same stock together, preventing you from being able to evaluate the effects of dollar cost averaging at a glance.

While only some of the solutions listed here display company announcements alongside pertinent performance figures, Tradingroom clearly displays the release of what it terms “market sensitive” information, allowing you to click through and read the item. What detracts from this feature is the way it requires you to pay to view additional content. Unlike Google Finance, which offers news items for free, Tradingroom invites you to click on a list of recently published stories that mention your stocks, at a cost of $2.20 per item.

The Australian Business
www.theaustralian.news.com.au/business

For some reason, rival media outlet News Limited has taken a different approach when creating a portfolio management solution for the online presence of The Australian’s business section. Using back-end architecture provided by Dow Jones, The Australian’s effort links to a range of sources from within the News Limited stable without charging for access.

That you cannot import or export data is a bit of a letdown, especially because the layout is so inviting. The site offers a powerful suite of charting and analysis tools, and enables users to quickly and easily create customised portfolio views, including a wide range of fundamental values.

Like our earlier experience with Google, we found a maddening discrepancy in our total return. After some investigation we found that although you were invited to enter transaction costs, they were not included in the total return, throwing our result out by a several hundred dollars. We also felt that an “allocation” pie chart was a bit of a gimmick that did not provide any useful information.

We did not expect much customer service from a free application, but it was frustrating that queries about our login details went unanswered, forcing us to enter the portfolio again under a different name.

Morningstar
www.morningstar.com.au

The merging of funds management specialist Morningstar with ASX stock tipper Aspect Huntley has created a powerful tool capable of doing almost anything. Users can import their portfolio from competing services via a spreadsheet, so skipping the tedium of having to key in the date, price and quantity of each holding.

More importantly, Morningstar is able to leverage its long-standing background in funds management. Unlike some other tools, this one allows your portfolio of shares and cash to sit comfortably alongside units in your managed funds. The service is not immediately intuitive, but is incredibly useful in the number of ways it allows you to display your performance. A single click lets you view your 12 month performance across a table, bar and line graph. Returns can be viewed over one, three, five and 10 years with another click. It also accurately tracks the reinvestment of your dividends.

The strong functionality also means increased complexity. It took me almost a day to work out how to enter the commissions from share purchases. The free service is really just a teaser for Morningstar's Premium membership offering, which bundles together research, stock tips and an automated asset allocation analysis tool called Portfolio X-Ray. This means that you are more likely to be subjected to spirited “upselling” from time to time. Morningstar's service is easily among the best in its class but it many respects it has outsmarted itself.

Ninemsn Money
money.ninemsn.com.au

The online presence of Money magazine offers one of the better portfolio tracking applications available. In addition to data and news feeds from Thomson Reuters, the charting tools are way ahead of the competition. Although it doesn’t offer the same flexibility in adding and subtracting different columns of fundamentals, its default options present investors with almost everything they want to know upfront.

A partnership with Morningstar provides investors with access to additional research and funds management tools, which although not immediately apparent would be invaluable if managed funds account for any portion of your portfolio. The news content was poor in comparison to the other solutions available but nothing is perfect, and this is probably the one feature of modern portfolio applications that we could do without.

What amazed us was just how difficult the application was to find: From the Money homepage, click on “Shares and funds” on the left-hand navigation bar then “Portfolio manager” from the next menu that appears.

Conclusion

It should not be altogether surprising that a magazine with a focus on personal finance would be the one to develop the most suitable solution for monitoring the performance of your portfolio. Money magazine’s portfolio manager hit all the buttons for an investor requiring a quick overview of their investments, in a package that is as malleable as it is easy on the eye.

The surprise from our five-product review was the poor design of some of the applications. Design flaws that contributed to inaccurate reporting were simply inexcusable. Money magazine’s portfolio solution won’t be for everyone and some investors might opt for one of the others listed here because of its strength in a particular field. But if you’re looking for a sensible and accurate application that delivers everything a good portfolio management tool should, it’s hard to go past Money magazine.

James Frost is the assistant editor of Eureka Report and the author of Dummies guide to Online Share Investing. Click here for a special discount exclusive to Eureka Report members.