X-Ray Your Portfolio

Morningstar's X-Ray is one of the most useful, free tools available to investors on line.  Spend a few minutes with the tool, and you'll learn a great deal about your portfolio and how your assets are allocated.

Here's an example of how it works using 5 assets.

Source: Morningstar

CLICK TO ENLARGE  As you can see, you need the ticker symbol of each holding.  For the right hand column, you have the choice to put in the market value of the holding or the percentage value of the holding.  I typically use the market value, reading it and the ticker right off of the broker statement.

Note the link to add more holdings and the "Show Instant X-Ray" button.

After I put in my entries, it looks like this:

Source: Morningstar

CLICK TO ENLARGE  Even for a large portfolio, or several portfolios combined, this takes very little time. Look at the "Total dollar value of the portfolio" box at the bottom of the column as a check to ensure you picked up all values.

So, now all you have to do is hit the "Show Instant X-Ray" button at the bottom.  This gives us some good stuff:

Source: Morningstar

CLICK TO ENLARGE  Asset allocation is the primary determinant of performance over the long term.  This provides the basic picture that you need to consider.

But the performance doesn't always go to you.  The brokerage community has been clever in siphoning off a goodly portion of funds over time - whether the market goes up or down!  How much you say?  Well, just scroll down on the Morningstar page.

Source: Morningstar

CLICK TO ENLARGE  As you can see, the funds have an average expense ratio of 1.90%, higher by .45% than similar funds.  The corresponding metric for well-diversified ETFs typically ranges between .10% and .25%. Granted they aren't nearly as "exotic" as the funds shown here.

This brief intro only touches on the information garnered from this exercise.  You'll want to examine the style boxes and the geographical location of your investments, etc.

All in all, I believe it is one of the best uses of your time in understanding your portfolio holdings.

Disclosure:  I definitely do not hold any of the funds mentioned above, although a new client does.  This post is for educational purposes.  Individuals should consult with an advisor or do their own research proior to making investment decisions.