New 80-20 Investor asset allocation tool

In the article 80-20 Investor review – Outperforming 98% of fund managers I highlighted the importance of being able to benchmark your portfolio in order to judge its performance. Since then I have been working on a piece explaining how to benchmark your portfolio. You will see the fruits of that work in due course.

However a huge part of being able to accurately benchmark a portfolio is to accurately work out what assets your portfolio is invested in. Or in other words, calculate your portfolio's asset allocation. The trouble is that funds can hold hundreds of investments within them. Some funds even hold different types of assets (such as equities, bonds and property) while others will invest globally.

For example if you hold the popular Fundsmith Equity fund, then where exactly is your money invested? While it may be in the Global sector that isn't much use when working out the underlying asset allocation of your portfolio. In fact I can tell you that 55% of the fund's assets are US equities, 12% are European equities and around 30% are UK equities. Now that's important to know if you are trying to avoid exposure to US equities in your portfolio.

At present the only way to find this sort of detail out is to look at the latest fund factsheet and hope it contains this information. The problem is that most fund factsheets are at least a month out of date and the level of detail they produce is deliberately very limited. That's because they don't want competitors to know exactly what they are doing.

So how else can you drill down into each fund you hold and work out what it's invested in before putting it all together at a portfolio level? Well you need to hope the investment platform you use can give provide this information. Again the problem is that most fund platforms don't have a tool that can do this. Even if a platform created one it wouldn't be much good if you have investments on various platforms, as many of us do.

In addition none of the tools I've seen allow you to see how a fund switch might influence your portfolio asset allocation. Neither do they let you play around with your portfolio quickly and freely.

The 80-20 Investor asset allocation tool

To solve this problem I have spent the week building an excel spreadsheet that can do all of this for you. I have analysed every unit trust out there (that's around 2,300 of them!) and broken down exactly where each invests its money.

I've then built a tool that allows you to enter the funds you hold and the amount you have invested in each of them. It then crunches the numbers on all of the hundreds of holdings within each fund and produces an overall asset allocation for your portfolio.

I previewed the tool with a few 80-20 Investor members and the feedback was great. To download the spreadsheet simply click on the button above (or below) this article. Once you've downloaded it it is yours to keep.

It contains an example portfolio (in fact it's my current £50,000 portfolio selection) to show you how it works. All you need to do is delete my example and then copy and paste funds from the fund list (on the second tab of the spreadsheet) into the relevant column and then enter how much you have invested in each.

The spreadsheet will do the rest. I pay thousands of pounds a year to be able to access the data on every fund's investments, essentially X-raying them. By creating a process to analyse this information I've been able to make a powerful tool for 80-20 Investor members to use at no extra charge.

Do please feedback on how useful you find the new tool. The data is 'as at today' and if people do find it useful I will look to update it periodically in the future.

I guarantee that when you analyse your portfolio you will be surprised by some of the markets you actually have exposure to