# Preferences - Portfolios

Portfolio preferences include relevant preferences for managing portfolios. These preferences allow you to set the options available in the fields when defining the basic information of a portfolio in the Basic info tab on the Portfolio window. The options you set up in these preferences allow you to flexibly group your portfolios. In addition, rebalancing preferences allow you to set up preferences for rebalancing.

## Benchmark index

Benchmark indices are used to compare the performance or return of a portfolio to an index. The benchmark index linked to a portfolio is visible, for example, in some P/L reports, and in Analytics Plus. Benchmark indices can be:

• Single or composite. Single benchmarks consist of one index. Composite benchmarks consist of a combination of different indices (for example, a composite of 40 % index A and 60 % index B).

• Regular or interpolated. Regular benchmarks are based on the dates and position shares that you entered. For example, you can set a benchmark that is valid from 01.01.2022 and contains 20% of a certain stock. Then, you can raise the position share, for example, to 22% starting from 01.03.2023, and so on. Interpolated benchmarks are based on the position shares on the start and end date of the period. The values between the dates are calculated by the system to create a gradual change that occurs on business days. For example, if you want to reduce investments in a particular sector from 30% to 20% over 5 years, you can enter two dates and specify the start and end position shares. The values in between the dates will be calculated automatically.

• General or portfolio-specific. General benchmark indices are defined in Preferences. You can then apply them to a portfolio by choosing a general benchmark in the Portfolio window, Benchmark tab. Portfolio-specific benchmarks are defined per portfolio in the Portfolio window.

If multiple portfolios follow the same benchmark index, it is worth defining a general benchmark index. Also, any modifications made to the general benchmark index affect the portfolios linked to the index.

### Benchmark parameters

The benchmark index information is defined in the fields on the right side of the window: a red star indicates a mandatory field.

Benchmark index name*

The name of the benchmark index.

Date

The date from which the benchmark index is valid in a portfolio. This is usually the start date of your portfolio (when the portfolio starts getting in transactions). If you have a regular benchmark, define one date and enter the position shares. You can later update the benchmark by adding a new date and re-defining the index positions. The updated index is valid from the new date onward. If you have an interpolated benchmark, you need to enter at least two dates: start date and end date of the change. For example, if you set a start date to 8.10.2022, the position shares get changed on 9.10.2022.

Interpolate shares between dates

Whether a benchmark is interpolated.

Holiday calendar

For an interpolated benchmark, set the holiday calendar to use. Position shares change only on business days.

### Benchmark content

Under each date in the table, you can see the index content. To add a position, click Add in the table row.

Date

See the Date field description above.

Security

The security the index follows. If you add securities in other currency than the portfolio's currency, the index values are converted to your portfolio's currency with a relevant FX rate.

For interpolated benchmarks, the start and end date indices must contain the same set of securities. If you want a position to be sold out gradually, add it with 0% weight on the end date.

Share %

The position share in the index. Position shares of different securities under one date must sum up to 100.

## Limit definitions

Limit definition preferences allow you to define limits, or investment constraints, that you can link to your portfolios for limit monitoring. For more information, see Limit definitions.

## Portfolio types

In the Portfolio type preferences you can define the portfolio types available for portfolios. Portfolio types are used to categorize the portfolios: for example, the portfolios could be divided into investment portfolios and insurance portfolios. For portfolio, a portfolio type is mandatory.

Portfolio types can be defined in the Portfolio type window in the Preferences. A portfolio type consists of a code and a name: the code is used to identify the portfolio type in the system, and the name is used to view and choose the portfolio type in the user interface.

Portfolio types also support restricting them to be shown only to specific user roles, allowing you to restrict the list of available portfolio types per user role within the Portfolio type dropdown in the Portfolio window's Basic information and Portfolio view's extended search fields. For example, you can decide which user role(s) are allowed to use which portfolio types for the portfolios they manage, especially useful in restricting the visibility of custom fields linked to a certain portfolio type.

If you want to restrict a portfolio type to be shown to only certain user role(s), you can do this by checking the appropriate roles within the portfolio type preferences - once checked, the type will be available only to the users with the selected role(s). If you don’t restrict a portfolio type to a specific user role, it will be visible to all users.

## Portfolios

Portfolios preferences allow you to enable different settings related to portfolios.

Generate a running number for portfolio ID automatically

When enabled, a running number is automatically created for a new portfolio as the portfolio ID, starting from number 1. When enabled, the next available number is set as the portfolio ID in the Portfolio window.

Show memos for the selected customer's all portfolios on the overview

When enabled, the Memo section on the Overview shows the memos for all of the selected customer's portfolios at the same time, instead of showing only the memo of the selected customer or portfolio.

### Note

Enabling this might slow down opening customers with lots of portfolios under them on the Overview.

Define the maximum number of portfolios shown in "Portfolio hierarchy" tree on the Overview

You can configure how many portfolios are shown in the "Portfolio hierarchy" section on the Overview, allowing you to control how many portfolios are shown for example when viewing a large portfolio group. By default, 500 portfolios are shown.

## Rebalancing

In the rebalancing preferences you can define the "method" for creating trade orders from rebalancing as well as the transaction types used in creating buy and sell trade orders when rebalancing a portfolio.

First, define the "method" trade orders are created by rebalancing.

Create trade orders based on trade amount (calculate unit price based on amount and difference)

Choose this option if you want to fix the amount and trade amount of the trade orders created by rebalancing and adjust the unit price to match amount * unit price = trade amount (default option). With this option, you will end up with trade orders that should be executed "with trade amount", since the trade amount equals the difference in the position between the rebalanced portfolio and the model portfolio.

Create trade orders based on amount (calculate trade amount based on amount and market unit price)

Choose this option if you instead want to fix the amount and unit price of the trade orders created by rebalancing and adjust the trade amount to match amount * unit price = trade amount. With this option, you will end up with trade orders that should be executed "with amount", since the amount and unit price equal the difference in the position between the rebalanced portfolio and the model portfolio on the rebalancing date.

### Note

Despite the "method" you selected, the trade orders are formed with the same logic, and the amount is always calculated in the same way - this selection determines whether the final trade orders are created by adjusting the unit price or trade amount to achieve valid calculations for amount * unit price = trade amount.

Below, define the transaction types used for the created trade orders, and when the trade orders are executed, for the transactions recorded to the portfolios.

Choose the transaction type used to create buy trade orders from rebalancing. This is the transaction type used for all buys.

Select the transaction type for "sell" trade orders (mandatory)

Choose the transaction type used to create sell trade orders from rebalancing. This is the default transaction type used for sells.

Select the transaction type used for trade orders when selling an entire position (optional, if not defined, then the selected "sell" type is used)

Choose the transaction type used for sell trade orders when rebalancing creates a sell trade order based on units instead of trade amount, for example when selling away an entire position from a portfolio. If left empty, the selected sell type is used for all kinds of sell trade orders.

Below, you can define a target range for portfolio's cash balance or buffer for cash to ensure positive cash balance. These preferences specifically affect what kind of trade orders are created when rebalancing is restricted to accounts.

Define target range for portfolio's cash balance (when rebalancing cash, portfolio is rebalanced only if cash is outside of the target range)

Define a target range, or minimum and maximum, for portfolio's cash balance: when restricting rebalancing to accounts, portfolio is rebalanced and trade orders created only if cash is outside of the defined target range. You can for example define that if there is between $0 and$10 on your account, portfolio would not be rebalanced at all to avoid unnecessarily small trades when there is only a little cash. Defaults for minimum and maximum are 0, resulting in target range of 0 cash balance.

• Minimum (in currency) - define a minimum in currency for your target range.

• Maximum (in currency) - define a maximum in currency for your target range

Define how much negative cash balance is increased by to cover all negative cash

Define how much negative cash balance is increased by when restricting rebalancing to accounts in order to ensure positive cash balance after all trades have gone through, even if market fluctuates unfavorably. You can define the buffer both as percentage and in currency, when the system would use the value resulting in a larger buffer. For example, if you have -100€ on your account and icrease defined as 2% (buffer 100€ * 2% = 20€) and 10€, rebalancing would use cash worth -100€ - 20€ (larger buffer used, 20€ > 10€) = -120€, i.e. rebalancing would sell worth a bit more to ensure negative balance will be covered.

• Increase as percentage (%) - define the increase as percentages.

• Increase in currency - define the decrease directly in currency

Define how much positive cash balance is decreased by to ensure positive cash balance

Define how much positive cash balance is decreased by when restricting rebalancing to accounts in order to ensure positive cash balance after all trades have gone through, even if market fluctuates unfavourably. You can define the buffer both as percentage and in currency, when the system would use the value resulting in a larger buffer. For example, if you have 100€ on your account and decrease defined as 2% (buffer 100€ * 2% = 20€) and 10€, rebalancing would only use cash worth 100€ - 20€ (larger buffer used, 20€ > 10€) = 80€.

• Decrease as percentage (%) - define the decrease as percentages.

• Decrease in currency - define the decrease directly in currency.

Below, you can define a limit for cash from sells used for buys. This allows you to be more conservative when doing a full rebalance: expected cash from sell orders is used to generate buys within the rebalance on one go, but sell orders' values are not counted for as 100% but for example as 90% or 95%. With this, even if prices drop between the time of the rebalance and the time of the execution of your sell orders (and you don't end up getting as much cash from your sells as originally expected), you most likely will get enough cash from your sells to execute your buys (since buys were not generated expecting 100% from your sells but a smaller percentage such as 90% or 95%).

Define how many percent (%) of cash from sells can be used to buy with

Define as a number between 0 and 100. Default is 100, indicating that 100% of cash from sells is used to generate buy orders with. This setting is considered when you use a rebalance method that "buys with cash from sells": this setting limits how big a share of the sell's value is used to generate buy orders.

You can also select what kind of a position listing the summary of the rebalance is shown.

Aggregate positions in the rebalance window

Allows you to determine how you want the rebalancing window to show your positions, whether you want to aggregate positions or whether you want to group positions per portfolio.

• If enabled, positions of all rebalanced portfolios are aggregated (summed up): one row is shown for each position, and the values on the row sum up all positions for that security.

• If disabled, positions are grouped by portfolio.

Finally, you can enable rebalancing with real-time 15 minutes delayed prices, fetched with a corresponding Market Price Connector from SIX. This allows you to utilize the 15 minutes delayed real-time market price feed from SIX to get more up-to-date results from rebalancing your portfolios – the more up-to-date your prices are, the more accurate is the prediction on how much to buy or sell.

Rebalancing with 15min delayed prices

Allows you to rebalance your portfolios with 15 minutes delayed real-time prices. Every time you trigger a rebalance on your portfolio(s), the market price connector fetches the latest available prices for all your positions' securities directly from SIX, and uses the prices when calculating your trade orders.

### Note

Rebalancing will always use the latest available price it can find - if you the connector to SIX is not enabled, or if you for some reason don't get a price through the connector for a security, then the latest available price stored in FA is used. Also, prices fetched from SIX are converted to portfolio currency with latest fx rates stored in FA when necessary.