We created this guide for both new and existing clients. It explains each section of our quarterly reports, defines commonly misunderstood terms, and highlights the sections we believe best illustrate your investment performance. We have created a sample report with hypothetical accounts and securities that looks identical to the quarterly reports we send all clients so you can follow along.

The first section you’ll see is the Client Return Summary. This section provides a great overview of the performance of your portfolio and allows you to quickly glean a large amount of information.

A. Date Range – This section shows the time period for this report. This date range will typically cover the preceding quarter. Unless otherwise indicated, all values, weights, and quantities are as of the end of the quarter (03/31/2021 in this case).

B.Portfolio Asset Allocation – This allows you to quickly see how your portfolio is allocated across 4 broad categories- Cash, Equity (Stocks), Fixed Income (Bonds, CDs, etc.), and Other.

C. Investment Growth – This graph shows how your portfolio value (the shaded green line) has compared to your cumulative net investment since we have been managing your investments (referred to as inception in these reports).

D. Cumulative Net Investment – Your cumulative net investment is the total additions of all assets (cash, stocks, bonds, mutual funds, ETFs) to all accounts minus withdrawals from all accounts (cash transfers, gifts, charitable contributions). Keep in mind that cumulative net investment only changes when additions are made from or withdrawals are made to external accounts. This graph will not be affected by transfers between accounts managed by us.

E. Time Weighted Returns – Time Weighted Returns (TWR) are a way to measure the compound rate of growth in a portfolio while eliminating the effects of cash withdrawals or deposits. The green bars show the TWR of your portfolio and the yellow bar shows the performance of the benchmark that most closely compares to your asset allocation.

F. Time Periods – The different time periods we show are all “trailing” returns with the exception of the “Since Inception” section. For example, the circled section shows the trailing one-year returns- covering the last rolling year as of the end of the quarter. For the sample report, this would be 4/1/2020 – 3/31/2021. The three year would cover 4/1/2018 – 3/31/2021 and so on. The since inception time period would cover the time period since we started managing your investments. Keep in mind that if you have made significant asset allocation changes in the past, historical benchmark comparisons may not be relevant.

The second section is “Account Details.” This provides a quick, high-level view of the value and performance of each account individually. Again, the relevant dates here are the last quarter meaning the “Beginning Market Value” and “Ending Market Value” would be the value on 12/31/2021 and 3/31/2021, respectively.

A. Portfolio Name – No one remembers each of their accounts by account number, so this is the easiest way to figure out which account we’re talking about in this section. We can change the name of any of these accounts for you for the purposes of these reports, so don’t hesitate to ask if you’re having a difficult time telling two similarly named accounts apart.

B. QTD Return – This shows the performance of each account individually over the last quarter.

C. YTD Return – This shows the performance of each account individually since the beginning of the calendar year. Since this sample report covers the first quarter of the year, these numbers are the same as the QTD numbers.

D. Total and Benchmarks – This section shows the values and performance of all your accounts put together and allows you to compare your performance to the performance of the benchmark.

The “Performance by Security for the Quarter” section gets even more granular than the Account Details section. Just like the Client Return Summary, these numbers are aggregated. For example, if multiple accounts held Apple stock, it would only be reported once in this section with all the positions added together.

A. Beginning Market Value – This is the total market value of each individual security held on the first day of the quarter (1/1/2021 in this case) across all accounts. If this position was initiated during the quarter, the beginning market value will show as $0.00.

B. Ending Market Value ­– The total market value of each individual security held on the last day of the quarter (3/31/2021 in this case) across all accounts. Keep in mind that this is influenced by both market price changes and trading activity.

C. Period Investment Gains/Losses – This is the gain or loss for each security after adding realized gains or losses, unrealized gains or losses, and dividend or interest income for the quarter.

D. Earned Income – The total dividend and interest income for the quarter.

E. TWR – The time weighted return for each security for the quarter.

The “Transactions” section shows all the buys and sells that occurred across all accounts during the quarter. This section helps you make sense of large differences between the Beginning Market Value and Ending Market Value numbers in the previous section by allowing you to identify positions that were initiated, exited, added to, or pared back during the quarter.

Finally, our “Billing Summary” section provides an exact breakdown of our fees, how they’re calculated, and where they are debited from.

A. Begin Date – This shows the start date of the billing for the account for the quarter. Typically, this will just be the first day of the quarter (as shown in the sample report above), however, if you open the account during the quarter, this would show the date the account was opened or the date the first deposit was made.

B. Billable Balance – The billable balance is the amount on which the fees are actually calculated. This will typically be the same amount as the market value, however, there are circumstances when it would be different- for example, if a client made a large deposit during the quarter and we prorated the fee on the deposited amount.

C. Effective Rate – This is the average fee taking into account our declining fee schedule as the portfolio value rises. Keep in mind that we always bill quarterly in arrears. This means we take a snapshot of the value of each account at the end of the quarter and then apply one quarter of the annual rate to those account values. In this sample report, we show a client with our standard fee of 1% on assets under $2 million, which is why the effective rate is 0.25% for the quarter.

D. Amount Deducted from Custodian – This column shows you how much was deducted in fees in total and from each account individually. Occasionally, clients will request we take deduct all our fees from one account or allow one account to grow without the impact of fees on that account and we are more than happy to meet those requests.

We always recommend that clients look at our reports and compare them to the reports from Schwab. We take pride in the transparency of our reporting and we want to make sure clients fully understand our reports. Please do not hesitate to contact us if you have any issues interpreting our reports or if you have suggestions on how to make the reports easier to read.