Joe Lan, CFA is a financial analyst at AAII.


Discussion

Edward from Oregon posted over 2 years ago:

Like prior software comparative reviews, this is a helpful beginning yet is incomplete and for me software covered lacks critical features.

1) Grid indicates that IAM (v2) calculates both Value-Weighted IRR/Time-Weighted Returns but having downloaded trial and looked at manual it seems to only do Value Weighted. For me being able to evaluate performance on same portfolio using both gives better insight.

2) While all 3 compare performance to Benchmarks, this would be much more meaningful if it simultaneously calculated Sharpe ratio or other measure. If out performance of benchmark is not on a risk adjusted basis (similar to how Hulbert does things)then it really isn't apples to apples and true out performance.

3) Since most of my portfolios are in taxable account, Quicken is the only one that does after tax performance analysis. However while I use Quicken for checking acct. I do not trust it to keep features of portfolio module constant over time and have read elsewhere people's frustrations with using Quicken as portfolio tracker.

Years ago I used Captools and recall that while there was a steep learning curve it did both time and asset weighted rate of return, as well as simultaneously doing it for before and after taxes (with your own personal tax rates entered for ST and LT). Current software seem to lack important features.


Joe from Illinois posted over 2 years ago:

Hi Edward,

Thanks for your comments.

IAM does in fact perform time-weighted return calculations. Page 385 of the user's manual goes over the definition used. It can be found in the Portfolio Summary Report.

I do agree that Sharpe ratio would be helpful when comparing performance because risk/volatility can be taken into account. Unfortunately, risk/volatility ratios such as Sharpe, Jensen's Alpha and Treynor are beyond the scope of most portfolio management software. We will, however, keep an eye out.

Quicken is better as a money management software. Portfolio tracking is just one of its areas. Captools was, and remains, a great program. Unfortunately, it is no longer being supported for individual investors and was replaced by a program significantly more expensive.


Peter from Tennessee posted over 2 years ago:

It should be noted that the Quicken product for Mac is not Quicken Premier. The grid shows Quicken-2007 for Mac but in fact the current product is Quicken Essentials for Mac which does not do portfolio management. The old product Quicken 2007 did do portfolio management but is no longer offered and will not run on OS-X Lion.


Leon from Arizona posted over 2 years ago:

I want my wife to learn Quickin Preimer 2011,
but i have not been able to find any instruction books. Do you know of any?


Edward from Oregon posted over 2 years ago:

Joe (article author?) thx for comment. I think you missed the point of my original post.

1) The chart of features indicates that IAM calculates both types of rate of return (Asset Weighted, AND Time Weighted); however it only does Asset Weighted even though you, I believe incorrectly indicate that it does Time Weighted. For me, both calculations are helpful insights into the portfolio. Of course most people want to know how their portfolio has been doing and Asset Weighted IRR gives this taking in to consideration asset flows for the portfolio.

2) Time Weighted return ignores inflows and outflows and is typically used to evaluate the performance of a manager who it is assumed has not discretion over when there are inflows and outflows AND therefore should NOT be penalized/rewarded in their performance evaluation due to these changes in assets which might have been on a great/terrible time period for the market. Yet as an individual I am also interested in Time Weighted IRR because for example I wish to compare several of my portfolios each of which follows the advice of a different financial newsletter. Using Time Weighted IRR for this comparison is the best approach. In addition, by comparing the Time Weighted and Asset Weighted IRR for a single portfolio I can get a sense whether my inflows/outflows helped or hindered performance. If I am adding to portfolio periodically, but chose to only purchase non-money market positions when say both 50 and 200 day moving averages are exceeded, then I can evaluate this timing rule.

3) It has been a long while since I looked at the formula for the two calculations, but the Asset weighted IRR is more complicated, and I believe already contains all of the data needed to all for ignoring asset flows and calculating the Time Weighted IRR. If this is so, it surprises me that when I spoke to IAM tech support that they indicated that they only do the Asset Weighted IRR, have no plans to include the other calc, and that it is very rare that any of their customers have asked for that as a feature. Unfortunately based on the chart in this review I wasted a bunch of time down loading, trying, and reading parts of the manual before finding out that for my purposes it is very inadequate. Given that AAII gives Members a discount on IAM (and hence indirectly is endorsing it as a "good" choice I urge AAII to "lobby" for getting both calcs into the program).

4) To AAII, I'd suggest future articles make it somewhat clearer how software rates regarding some of the different goals that a user might have:
a) Track my portfolio quickly and easily with little manual input from my AND calculate its rate of return.

b) Do above and compare performance to a benchmark; c) to a benchmark that I can define e.g. a spliced benchmark using for example 40% SP500 20% MSCI and 40% 5 year treasuries.

d) Do above and calculate the Time Weighted return

e) Do above and calculate return after certain tax assumptions or e) allow me to enter my estimated LT and ST cap gains tax rate as well as state tax rate for CG.

Somewhere in this hierarchy I'd also put calculate the Sharpe ratio. I have assumed that all software will do a good job at supporting one at tax preparation time with Schedule D.

If one is investing in a taxable acct all that you can "live on" is your after tax return. If one's return does not beat an appropriate benchmark (and most people do not so a passive asset allocated index approach makes most sense). Even if one beats a benchmark then the question that Hulbert FInancial Digest raises appropriately is - is the excess return due to taking more risk than the index?

FWIW, for the time being rather than creating my own Excel spreadsheet, the portfolio tracker of Morningstar is fairly good on the features I need.


Peter from Tennessee posted over 2 years ago:

Leon, there are many Quicken books offered for sale at Amazon. I have been using Quicken for many years. I don't remember if I ever had a manual. I think maybe the help and users guide included with the software may have been better in days gone by.


Edward from Oregon posted over 2 years ago:

In my 2nd post I incorrectly commented on Joe's comment - IAM calculates only a Time Weighted IRR as he reported. Nonetheless, it only does the one type of IRR calc. Unfortunately AAII does not allow one to edit comments. Sorry for any confusion I may have caused, I believe the rest of my comments are accurate.


David from Virginia posted over 2 years ago:

I agree with Edward that the IRR calculations are of great interest. If there are corrections to be make from the original article, could we get an update? Thanks.


Saul from New York posted over 2 years ago:

Although I don't recall a mention of this in the review, IAM handles options and related transactions very well. As far as I know, this is a feature that is not included in the other two programs reviewed. Option traders should try IAM for this feature alone.


Edward from posted over 2 years ago:

Do any of these programs deal with foreign exchange issues? I hold stocks denominated in both $CDN and $US and the ability to handle differenrt currencies woudl be an important consideration.


Ron from posted over 2 years ago:

I have the same question as Edward. Can any of the portfolio management programs handle transactions, portfolios and reporting in more than one currency? It should be possible to track transactions and/or portfolios in different currencies and then to automatically convert to a single user-selected currency using FX rates available on the internet and display consolidated reports.


Jeffrey from Vermont posted over 2 years ago:

I'm back looking at reviews. I use Quicken 2010 and find it's such a pain, so many transactions don't download properly and need manual attention. I've got so many Placeholder Entries that it will take hours to clear them up. Anyone have experience with programs that do the downloads (from Scottrade and Vanguard) more easily?


William from Virginia posted about 1 year ago:

As noted on Quicken's site, unlike past versions, Mac users cannot use the current version of Quicken Premier for stocks and bonds unless you are running a Windows emulator - a pain. You should correct your table to reflect that.


Brad from Illinois posted about 1 year ago:

It looks like Captools is still the only one offering Multi-Currency Portfolio Management.

Is that correct?

:Brad

.


R Rhodes from Texas posted about 1 year ago:

Your own surveys show a dramatic increase in the use of Apple computers. I suggest in the future that Windows or MAc usability be noted right at the top of every comaprison study. It will save the MAc users valuable time.

Bob


Ivan Hipschman from California posted about 1 year ago:

I have used both FundManager and a version of Investment Account Manager (actually Portfolio Manager 5, a clone of Investment Account Manager which was marketed by BetterInvesting). Having used both, I would like to give my opinion.

I actually find FM easier to use than IAM. It has excellent documentation and help facilities. Both programs have excellent, personal suppport. IAM used email and FM has an online forum. Both responded quickly and helpfully, but the forum format is very helpful in making other users' questions and the responses to them available.

The major feature which makes FM more useful is it's excellent graphic capabilities, which are totally absent from IAM and are not referenced in the review. The graphic capabilities I use include simple plots of investments showing close, high, low and volume for the day and can include dividends if desired; moving averages; allocation pie charts and stack charts, which show the change in allocation over time; overlay, for comparison, of multiple investments with or without dividends; portfolio value; investment or portfolio gain; investment cost - value; investment cost - price, which includes a line showing my break even point for the investment on any date; and a great many more graphs which some may find useful. All the appropriate graphs include symbols which show my purchases, sales and dividends for that security. The professional version, which I do not own, adds more sophisticated technical analysis graphs. It is also helpful that FM allows price data download from multiple sites, which is valuable if Yahoo is down or does not cover the securities you want information on.

FM's reporting capabilities are also superior to IAM and include custom report capabilities using about 200 predefined columns which can be built into a custom report. The professional version, again which I do not own, reportedly allows creation of custom report columns using formulas of your own design.


Mark from Arizona posted about 1 year ago:

I am a representative of Fund Manager. A few comments on our product:

1) Fund Manager supports multiple currencies in all versions of the product. You can track investments in up to 25 different currencies. There is a tutorial on this here:

http://www.fundmanagersoftware.com/tutor_currency_video.html

2) Fund Manager supports calculating Sharpe Ratio and many other statistics in the Professional and Advisor versions. See the Custom report.

3) Fund Manager calculates both Time Weighted Returns (TWR) and Return on Investment (ROI) yields. The online documentation has a discussion of each, and the equations used here:

http://www.fundmanagersoftware.com/help/yields.html

4) The review's feature comparison table incorrectly states that Fund Manager doesn't support short positions. It does support short positions. For a FAQ on this topic, see:

http://www.fundmanagersoftware.com/faq_short_positions.php

5) The review also incorrectly states Fund Manager doesn't support bond premiums, discounts and amortization. It does support all these, and the Professional version has an amortization/accretion calculator.

6) The review summary has a note about our broker downloads maybe not being correct? I don't believe this is true, nor is it mentioned in the review of our product.

Thanks,
Mark


Bruce Stowe from Washington posted about 1 year ago:

I've used IAM for a number of years - back to it's PRK days. Over the past two years it has become increasingly buggy with frequent crashes, and in one instance randomly doubling my position in a single portfolio. I suspect that by the nature of the errors and time frame the program has not been properly upgraded to Windows 7. Upon query support has told me at various times that the program could not have made the errors; that support does not know why these events happened, or that the problem is Norton. I have now had to remove and re-install IAM three times over the past 18-24 months. FM clearly has more flexability in user defined fields and reports - including IRR/ROI by objective that IAM does not offer. Further the file formats supported by FM for import/export are more useful.
IAM is due for a good dusting and cleaning, and strong upgrade. IAM's current status is such that I would strongly encourage a good look at FM before investing the time and money to properly set-up you portfolios in either program


Kevin Ryan from Florida posted about 1 year ago:

After reading all of these posts I'm convinced that the best software is my lot history sheet and macro enabled work books that I have developed in excel. I'd like to invest in something professionally developed but the pros and cons don't add up so I'll wait it out until "there's an app for that"!


Teck from Illinois posted 11 months ago:

i am a recent reader of the comments - and i need help from any user of IAM on
constructing portfolios as opposed to ex-post portfolio reporting and performance analysis - and
if anyone has used the IAM's data feed from QuoteMedia (any issues)
does IAM do multi currency?


Jason from Hawaii posted about 1 month ago:

I found Fund Manager 12.9 to be a very intuitive, powerful investment management program. It has that satisfying feel of wanting the program to do something, and then realizing on the next click, it exceeded your expectations. The discussion board is very help. The most difficult part is understanding and setting up the portfolio structure so it can sync with online sources shared sweep accounts work correctly. It took most of a Saturday to setup the software, consolidate six accounts and load 15 years of history. Time very well spent!


John from California posted about 1 month ago:

I have been using IAM since December, 2013, replacing the AWFUL Quicken Premier which I still use ONLY for downloading data from banks and credit cards.

IAM handles data download fairly well for Schwab and Fidelity. But it requires manual input of new purchases from Vanguard. It clashes when using Trend Micro anti virus, which necessitates my turning the anti virus off BEFORE I can load IAM. Their tech support via phone is great. Will answer your QUESTION briefly.

I subscribe to stockcharts.com for graphs. Basically IAM does what it suppose to do. I use it mainly to find out one of the many Preferred stock I may hold on cost. And it does that very quickly using their program, written in the FoxBsse language (a compiled version of old dBase).

Quicken Premier asked numerous SILLY questions when you download, even asking you whether you want to use average cost or FIFO for a money market fund. Awful software in everyway. This is happens when Intuit has the monopoly. I can say the same on their awful Turbo Tax, gets more bossy (force you to go through interview. extremely rigid on the Form 8949, which is a must for any stock trading.


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