A few weeks ago I wrote about the fact that we’ve been reconsidering our asset allocation. In the comments following that article, a commenter named Kurt suggested that I check out Vanguard’s Portfolio Watch feature for analyzing our portfolio. I hadn’t heard of Portfolio Watch, so I decided to investigate.
As I’ve noted in the past, we have a relatively complex portfolio, with multiple retirement accounts, two Roth IRAs, and a taxable investment account. This adds up to seven accounts held at three different institutions (Vanguard, Fidelity, and TIAA-CREF). Despite the complexity of our situation, Portfolio Watch does a fantastic job of simplifying things.
The good news is that Portfolio Watch can easily pull in data from non-Vanguard accounts and then slice and dice your holdings in a variety of different ways. Given how useful this feature is, I thought I’d put together a little tour of what it has to offer.
For starters, you need to have an account with Vanguard to be able to access Portfolio Watch. Assuming that you have an account, simply login and then look at the bar of links across the top. Simply find the Portfolio Watch link (third from the left; see below) and click it.
Assuming you want to track outside investment accounts, look for (and click) the following link, which allows you to view and modify the accounts being being tracked.
Now look in the right sidebar for a link for including investments held at other institutions.
From here, you simply specify the institution(s) where you have accounts and provide your login credentials. In our case, this involved linking up the Fidelity and TIAA-CREF accounts, as well as pulling in my wife’s Roth IRA (while this account is at Vanguard, it’s not accessible from my login).
Now the fun begins…
While Vanguard has always provided a pie chart of your overall allocation, you can now get a single pie chart representing your entire investment portfolio, including the non-Vanguard component. As you can see, we’re currently holding 80.3% stocks as 19.7% bonds.
From there, you can drill down further into your stock or bond portfolios. Since our entire bond portfolio is currently in Total Bond Market index funds, I won’t bother delving into that.
Let’s take a look at our stocks…
As you can see from the pie chart above, our stock holdings are currently split between U.S. and international stocks in a 68.9%/31.1% ratio. Drilling down further into domestic stock holdings, you can pull up a little bar graph showing your large, mid, and small cap allocation in comparison to the market as a whole — as you can see, we’re a bit over-weighted (by design) in small-cap stocks.
What about investment style?
That’s here too… In the form of the following nine box grid:
Beyond all the pretty pictures, there are detailed tables comparing your sector allocation to the general market, the regional representation of your international holdings, etc. And alongside each of these items is a statement telling you if there’s anything to be worried about.
For us, everything appears to be a-okay with the exception of a “caution” rating because foreign stocks represent “a very large portion” of our portfolio. This strikes me as a bit odd, as Vanguard has published a white paper arguing that a 20-40% allocation to international equities is ideal, and we’re smack dab in the middle of that range. Regardless, I’m perfectly comfortable with where we’re at, so we won’t be making any changes.
The bottom line…
For those of you with a Vanguard account as well as investment held at other institutions, I highly (highly!) recommend using Portfolio Watch. It’s an incredibly detailed, powerful, and efficient tool for keeping track of your entire portfolio all at once.
If you were willing to re-select your company, which would you choose in 2018?
As a result of what I can only guess was the manual entry of non-Vanguard accounts and balances into Portfolio Analysis, I recently received a mailing from Vanguard welcoming me as a Voyager member. My combined balances add up to over $100k, but my Vanguard balances alone do not. Interesting.
But in any case, I just checked, and I now have the Portfolio Watch button instead of the Portfolio Analysis button. This seems like a pretty easy way to con the system. Just manually enter 1 share of Bershire Hathaway A shares and bam, you’re a Voyager member.
2million & Flexo: It’s interesting that you’re having trouble tracking things without symbols. I have a TIAA-CREF account that has holdings without symbols. In my case, Portfolio Watch slurps the balances and names of the holdings in, but doesn’t know how to categorize them, so it sticks them under “Other.”
The good news is that you can specify the type of holding so it categorizes it properly. For example, my total bond market fund I was able to tell it to categorize them as bonds, and the term as intermediate (identical to the other total bond market funds). So… No more “Other” category. It handles everything properly now.
Check it out before you decide against using it.
I tried out Portfolio Watch a couple months ago and agree its got potential, but I got fustrated with it. Like Flexo — my 401k investments couldn’t be tracked because they don’t have symbols. It also had trouble categorizing some investments. Other accounts had problems updating.
However, its the best tool I found so far — much better than anything MS Money has available.
I know my financial firms are doing this. I personally used BOA ‘My Portfolio’, which has all of our accounts aggregated and makes life very simple as far as figuring out our asset allocation. For folks that don’t have $100K with Vanguard, I would highly recommend a service like ‘My Portfolio’. You can even link up your JetBlue rewards points, Verizon cable and cell-phones bills etc. etc. all into one place.
From Vanguard concerning my account:
Portfolio Watch is a tool that is almost identical to Portfolio Analysis
except Portfolio Watch is only available to clients enrolled in Vanguard’s
Enhanced Services (with Vanguard assets greater than and equal to
$100,000).
Thanks for sharing this information about Vanguard’s Portfolio Watch. I hadn’t heard about this useful feature. Some of my members at Fat Pitch Financials Contributor’s Corner were interested finding such a feature to deal with tracking all of their investment accounts.
I don’t think you have to be a higher level customer. I just recently opened the STAR fund (lowest minimum possible) and I see that feature on my account. 🙂
Flexo: Interesting you should mention that… I foresaw similar problems with TIAA-CREF and so, when we re-did our allocation, I made sure that account wound up holding funds with symbols.
The option’s available to me, and I have a small amount of money in Vanguard accounts. I really liked the tool. The only drawback was that some of my 401(k) funds (held at and administered by the company I work for) do not have symbols, and thus, Vanguard cannot provide consolidated info for me. Otherwise, it would be very handy.
That’s definitely possible, and I’m not . Just have a small holding so far in a single fund and recently rolled over a 401k there but haven’t quite hit the Voyager (or Flagship!) level.
Andrew: Interesting. Are you a Voyager (or above) customer? Perhaps this functionality is limited to “higher level” customers? I’m not sure.
Hmm my tabs at Vanguard look different. My third tab is called portfolio analysis instead of portfolio watch. And when I go to add external investments it doesn’t give me the option to put in the log-in credentials.
Instead I can only input what I own manually, which while useful, is not really feasible given the ongoing contributions, etc. to each of these other investments.
JFS: Great point. However, these are all index funds tracking major indices, so I’m not too concerned about allocations drifting around over time within funds.
Nice job. However, before making a final decision, make sure the profile of how your funds are allocated are updated. Too many times decisions are being made from information provided by Yahoo or MSN that is incorrect or 3 to 6 month old.
Where do you primarily invest in your international funds? Mostly large cap blends as well?
Thanks for this post! I’ve been signing up for and then canceling premier membership with Morningstar each year to run their detailed X-ray, which is an excellent tool, but as a Vanguard investor, I’ll give this a try.
Good summary.
One thing everyone should keep in mind is that this does entail giving vanguard all your account info. I got comfortable with it (and you did too), but some people may not be able to.
I actually found a bust in the feature the other day, unfortunately. I ran a situation where I had a large drop in my checking account (taxes). Somehow that changed my allocation between domestic and international stocks (as a percentage of total equities). It didn’t change it much (10 bps), but it was odd that it would change at all.
Don’t know why that would have happened, but I think as a snapshot tool, it’s still great.