¶ Introduction
Investment management involves the oversight of financial securities and assets, including strategies for acquiring, disposing of, and growing investment portfolios. Portfolios can include both cash and non-cash investments, and may be actively traded to achieve specific investment objectives.
Diversification of portfolios often combines cash and non-cash investments. The Treasury Management System (TMS) also supports cryptocurrency investments and management of nominated beneficiaries.
¶ Objectives of portfolio management
- Establishing the investment objectives
- Diversifying the portfolio to reduce risk and maximize returns
- Monitoring the performance of the portfolio and taking corrective action when necessary
- Rebalancing the portfolio in order to maintain the desired level of risk and return
- Tax planning and implications
- Asset allocation to determine the desired level of return and risk
¶ Navigation
Inside Microsoft Dynamics 365, Axnosis created a storage area for Investments Portfolio management . From the main menu, browse to Treasury, Investments, Investment portfolio
¶ Assumed Setup
The following configurations are considered completed already:
- Number sequence
- User roles
- Treasury workflows
- Customers
- Vendors
- Cash investments
- Non-Cash investments
- Treasury parameters
- Risk profile
¶ Daily use
¶ Step 1: Create a new Investment portfolio
The portfolio management list page will provide an overview of the portfolios’ overall situation, so that the investment strategy is devised using all available information - Its valuation, performance and relation to individual benchmarks.
The following columns will be displayed on the list page:
- Investment portfolio number
- Description
- Status
- Approved
- Canceled
- Proposed
- None
- Risk profile - coose between:
- Very aggressive
- Aggressive
- Moderately aggressive
- Moderate
- Conservative
- Risk averse
- Customer account
- Inception date
- Valuation date
- Last valuation
- Currency
- Underwritten by (vendor account)
- Navigate to: Treasury > Investments > Investment portfolio
- Click on New
The Investment portfolio number is system generated
- Type a Description
- Select a Risk profile from the dropdown menu
- Options to choose from:
- Very aggressive
- Aggressive
- Moderately aggressive
- Moderate
- Conservative
- Risk averse
- Options to choose from:
- Select a Customer account from the dropdown menu
- Enter an Inception date
- Enter a Currency
- Click OK
- The details page is divided into the following FastTabs:
- General
- Ratios
- Performance
- Linked investments - cash
- Linked investments - other
- Investment structure
- Nominated beneficiary details
¶ Step 1.1: General FastTab
The General FastTab consists of the following sections:
- Overview
- Investment portfolio number
- Description
- Status
- Customer account
- Underwritten by
- Detail
- Inception date
- Realisation date
- Termination date
- Valuations
- Last valuation
- Valuation date
- Currency
- Additional
- Duration
- Days
- Risk register
- Financial risk register
- Risk profile
¶ Step 1.2: Ratios FastTab
Fields on the Ratios FastTab:
- Date
- Enter a date
- IRR
- Internal Rate of Return
- TER
- The total expense ratio
- Alpha
- The excess return of an asset or portfolio relative to the return of its benchmark index
- Beta
- Beta (β): A measure of the systematic risk or volatility of a security or portfolio compared to the overall market.
- Correlation
- Correlation, in the finance and investment industries, is a statistic that measures the degree to which two securities move in relation to each other.
- Correlations are used in advanced portfolio management, computed as the correlation coefficient, which has a value that must fall between -1.0 and +1.0
- R-Squared
- Measures the percentage of a portfolio's movement that is explained by movements in its benchmark index, expressed as a value from 0% to 100%.
- It indicates benchmark correlation rather than direct performance.
- Sharpe ratio (Sharpe index)
- A risk-adjusted performance metric calculated as the portfolio return minus the risk-free rate, divided by the portfolio's standard deviation (volatility).
¶ Step 1.3: Performance FastTab
Expand the Performance FastTab and enter the necessary data:
- Click on Add
- Enter a date
- Enter the opening amount
- Enter the movement
- Enter a closing amount
¶ Step 1.4: Linked investments – cash FastTab
The following fields will be automatically filled out when adding an investment to a Portfolio record, by utilizing the data from the chosen record:
- Click on Add line
- Cash investments
- Bank account
- Account type
¶ Step 1.5: Linked investments - other FastTab
- Click on Add line
- A non-cash investment can be chosen from the dropdown menu
A single Investment cannot be connected to more than one Portfolio or Loan
One portfolio may be linked to a number of investments (both Cash- and Non-cash investments)
¶
Step 1.6: Investment structure FastTab
Selecting a record in the Linked investments - other FastTab automatically refreshes the fields on the Investment structure FastTab
Structure details pull directly from the selected Equity record located under the Lines FastTab (Lines Index tab) of that Non-Cash Investment
The Investment structure FastTab displays the following read-only fields:
- Investment category
- Investment subcategory
- Investment type
- Sector
- Industry group
- Industry
- Sub-industry
- Asset class
- Asset sub-class
- Portfolio
- Vertical
- Investment strategy
- Accounting classification
- Currency
- Reporting currency
- FX treatment
- Country/region
- State
- County
- City
¶
Step 1.7: Nominated beneficiary details FastTab
- Expand the Nominated beneficiary details FastTab
- Click on Add to add a new line
- The Beneficiary ID is system generated
- Enter a Name
- Enter a Surname
- Select the Relationship. Choose between
- Father
- Mother
- Grandfather
- Grandmother
- Child
- Brother
- Sister
- Friend or
- Other
- Enter a From date
- Enter a To date
- Choose between Percentage or Amount
- Enter a Value
- Select a Currency
- Type an Email address
- Enter a Telephone number
¶ Step 2: Status
The Status of an Investment portfolio can be set to:
- Approved
- Canceled
- Proposed
- None
These statuses can be used in conjunction with Workflows.
¶ Step 3: Investment management workspace
The portfolio management Workspace will provide an overview of the portfolios’ overall situation, so that the investment strategy is devised using all available information - Its valuation, performance and relation to individual benchmarks.
The list page will show the Investment portfolio number, Description, Status, Risk profile, Inception date, Valuation date, Currency and Customers or Vendors.
- Navigate to: Treasury > Workspaces > Investment management
- Click on the Investment portfolio tab on top
- This page is divided into three sections:
- Performance over time
- Top five funds and
- Asset allocation
