Portfolio Visualizer Review: The Best Investing Tool For Your Perfect Portfolio (2024)

Making the right investment decisions relies heavily on how much you know about investment. Good knowledge of investment analytics can greatly improve your decision-making by using the best investment tool for your perfect portfolio, which is a portfolio visualizer.

For a long time, the Portfolio Visualizer has helped many individuals make better investment decisions by comparing investment products and portfolio analysis.

What is Portfolio Visualizer?

According to PV, Portfolio Visualizer is an online software platform for portfolio and investment analytics to help you make informed decisions when comparing and analyzing portfolios and investment products.

With a suite of quantitative tools that covers portfolio modeling and backtesting, Monte Carlo simulations, portfolio optimization, factor models, and tactical asset allocation models.

Their simple and understandable system makes it easy for you to understand. You get insights on market analysis as well as financial instruments.

Some of the core services they offer include;

• Model and analyze the performance of different asset allocations and portfolios based on our rich set of historical data
• Simulate and optimize portfolios based on historical returns or forward-looking capital market expectations
• Identify and test the risk factor exposures of investment products
• Test tactical asset allocations models that aim to offer better risk-adjusted performance
• Generate reports and export data in PDF, Excel, and CSV formats
• Import custom data series for use as portfolio assets and benchmarks

Why Use Portfolio Visualizer?

There are only a few platforms wherein you can find investment analytics for your portfolio products. While a good number of them offer good services, a few things make Portfolio Visualizer a great platform.

Apart from their accurate financial projections, their keen attention to detail ensures they properly identify risk factors for your portfolio. Using their analysis, they create a personalized report that will help your investment sprout.

A decision to work with Portfolio Visualizer will bring success to your portfolio, and an investigation into the features will convince you.

What are the Key Areas of Portfolio Visualizer?

Portfolio Visualizer has about six key areas which are;

• Backtest Portfolio
• Factor Analysis
• Asset Analytics
• Monte Carlo Simulation
• Portfolio Optimization
• Timing Models

#1. Backtest Portfolio

In this branch, you can backtest a portfolio asset allocation and contrast the historical and realized returns and risk characteristics against other lazy portfolios.

There are three key areas of Backtest Portfolio

Backset Asset Allocation

This portfolio backtesting tool allows you to create one or more portfolios based on the selected mutual funds, ETFs, and stocks.

You can analyze and backtest portfolio returns, risk characteristics, style exposures, and drawdowns. The results treat returns and fund fundamentals-based portfolio style analysis along with risk and return decomposition by each portfolio asset.

Also, you can compare up to three different portfolios against the selected benchmark and specify any periodic contribution or withdrawal cash flows and the preferred portfolio rebalancing strategy.

Backtest Portfolio Asset Allocation

This portfolio backtesting tool allows you to build one or more portfolios dependent on the selected mutual funds, ETFs, and stocks.

You can analyze and backtest portfolio returns, risk characteristics, style exposures, and drawdowns. The results cover returns, fund fundamentals-based portfolio style analysis, and risk and return decomposition by each portfolio asset.

You can compare up to three different portfolios against the selected benchmark and specify any periodic contribution or withdrawal cashflows and the preferred portfolio rebalancing strategy.

Backtest Dynamic Allocation

This portfolio backtesting tool allows you to backtest a historical sequence of dynamic portfolio allocations where the portfolio model assets and their weights have changed over time.

The results include portfolio risk and return metrics, drawdowns, rolling returns, and returns-based style analysis.

A periodic contribution or withdrawal can also be specified along with an optional static allocation portfolio or a comparison benchmark.

The historical assets and allocation weights can be imported in a standard Excel or CSV file format. The file layout captures the start date for each allocation, along with assets and their weights.

Calendar-specific rebalancing can be optionally enabled. Otherwise, the allocation will drift freely between the specified trade dates. Please refer to the sample files below for the supported data import formats.

#2. Factor Analysis

This is where you run a regression analysis using Fama-French and Carhart factor models for individual assets or a portfolio to analyze returns against the market, size, value, and momentum factors.

There are six sections of Factor Analysis which involve;

Factor Regression Analysis

This factor regression tool supports factor regression analysis of individual assets or a portfolio using the given risk factor model.

The multiple linear regression indicates how well the risk factor exposures explain the returns of the given assets or a portfolio. The supported equity risk factor models include:

• The capital asset pricing model (CAPM) with market factor (MKT)
• The Fama-French three-factor model with market, size, and value factors (MKT, SMB, HML)
• The Carhart four-factor model with the market, size, value, and momentum factors (MKT, SMB, HML, MOM)
• The Fama-French five-factor model with market, size, value, profitability, and investment factors (MKT, SMB, HML, RMW, CMA)
• The q-factor model with market, size, investment, return on equity and expected growth factors (MKT, ME, I/A, ROE, EG)

Additional supported equity factors include the short and long-term reversal factors (STREV, LTREV) based on Fama-French factor data, quality (QMJ) factor based on both AQR and Alpha Architect factor data, and bet against beta (BAB) factor based on AQR factor data.

You can include the fixed-income factor model to explain returns based on term risk (interest rate risk) and credit risk exposures for fixed-income and balanced funds.

The fixed income factors can be further adjusted to account for the yield curve and to add high-yield credit risk as an additional factor.

Risk Factor Allocation

This tool supports optimizing the portfolio asset allocation based on the targeted risk factor exposures.

The returns of the given portfolio are first regressed against the selected risk factor model consisting of equity risk factors (e.g. market, size, value), fixed income risk factors (e.g. term, credit), custom risk factor series, or any combination thereof.

Based on the regression results, the targeted risk factor exposures of the portfolio can then be adjusted. You can also specify a list of optional assets that the optimizer can choose to add to the portfolio to meet the targeted risk factor exposures.

Match Factor Exposure

This tool allows you to match the factor exposures or performance of the given asset or portfolio using a combination of assets from the given list.

The tool finds the combination of the given assets that closely clones the factor exposures of the target asset or portfolio based on the selected period and factor model. The closest match based on past performance is also displayed for comparison purposes.

Principal Component Analysis

Use principal component analysis to analyze asset returns to identify the underlying statistical factors.

The statistical factors are the independent sources of risk that drive the portfolio variance, and the returns of each corresponding principal portfolio will have zero correlation.

Based on the daily or monthly returns, you can perform the principal component analysis on either the correlation matrix or the covariance matrix.

Factor Return Statistics

This part explores factor correlations and risk premia over different time periods.

• Mutual Fund and ETF Factor Regressions
• Mutual Fund and ETF Factor Performance Attribution

#3. Asset Analytics

In the asset analytics section, you can easily fund based on asset class, style, and risk-adjusted performance and analyze asset correlations.

There are six arms of asset analytics which include;

• Fund Screener
• Asset Class Correlations
• Asset Correlations
• Fund Performance
• Asset Autocorrelation
• Asset Cointegration

#4. Monte Carlo Simulation

Under the Portfolio Visualizer, you can run Monte Carlo simulations for the specified portfolio based on historical or forecasted returns to test long-term expected portfolio growth and survival and the capability to meet financial goals and liabilities.

There are three arms of the Monte Carlo Simulation such as;

• Monte Carlo Simulation
• Financial Goals
• Asset Liability Modeling

#5. Portfolio Optimization

The Portfolio Optimizer helps you navigate the efficient frontier to explore risk vs. return trade-offs based on historical or forecasted returns.

More so, you optimize portfolios based on mean-variance, conditional value-at-risk (CVaR), risk-return ratios, or drawdowns.

Finally, you can apply the Black-Litterman model to find the optimal portfolio based on market views.

• Historical Efficient Frontier
• Forecasted Efficient Frontier
• Portfolio Optimization
• Black-Litterman Model
• Rolling Optimization

#6. Timing Models

In this model, you get to test different market timings and diverse tactical asset allocation models.

Some of the supported models include;

• Shiller PE Ratio Market Valuation
• Moving Averages – Single Asset
• Moving Averages – Portfolio Assets
• Momentum – Relative Strength
• Momentum – Dual Momentum
• Seasonal Model
• Momentum – Adaptive Allocation
• Target Volatility

Conclusion

Portfolio Visualizer lets you test a wider variety of assets than any other site. From emerging markets to gold to REITs, they can help you. Furthermore, if you’re an international investor, you can easily build portfolios on European or world stocks.

The idea that allows you to test three asset allocations makes it incredible. More so, their detailed report crowns everything.

Portfolio Visualizer is a perfect platform to boost your assets easily and profitably.

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