Comparing the actual weights of your portfolio with the target weights can be a worthwhile exercise. This article will walk you through how to do this on the Novus Platform.
Step 1: Clarify Targets
The first step is to determine the breakdown of your target portfolio. For example:
Asset Class | Target Weight (%) |
Fixed Income | 20 |
Public Equity | 38 |
Properties | 2 |
Brokerage Accounts | 6 |
Private Equity | 34 |
Make sure that your target weights add up to 100%.
Step 2: Add Target Weights
Add target weights to the platform using the models tab.
Go to the Configurations Tab
Go to Models > Fund Attribution
Select “Models” in the top bar
Click “ + Model” in the top right corner
Add each line item from the pre-determined breakdown
Add the title
Assign the relevant benchmark
Add the weight
Step 3: Make Assignments
Next, we need to assign each line item in the portfolio to the relevant model (or target weight).
Go to the Configurations Tab
Go to Models > Fund Attribution
Select “Assignments” in the top bar
Select the Portfolio for which you would like to set targets
Click “New Assignment” in the top right corner
Title your target scenario
Hover over the Scenario column next to the relevant position to assign its respective model
You must assign each line item with a model (you cannot group an entire section of the tree)
Repeat step 7 for all line items in the portfolio
Step 4: Analyze
Start with this dashboard template: https://alpha.novus.com/reporting/dashboard/81419
Select the portfolio you would like to analyze
Select the scenario you just created
Click “Apply & Save”