Researching investments can sometimes feel like aimlessly wandering the aisles of a giant grocery store while hungry. You know you need something, but without a recipe in mind it’s easy to fall into the trap of grabbing the first easy but unhealthy thing that sounds good. In the end, there’s a decent chance you will regret your choice.
Or maybe you’re a foodie who has something in mind but reads every label and agonizes over minute ingredient lists. For educated shoppers, analysis paralysis can still be crippling as it takes forever to decide on the perfect option for everything in the cart. Does it really have to be this difficult?
The equivalent in the investing world is the absolute gauntlet of a process required to find the right fund. Open up your brokerage account or a good ETF screener, and the sheer number of fund variations are insane. Picture the market full of similar shoppers like you, and you’ll find the same assortment of people touching every apple, wondering what the words on the labels even mean, and loading up on prepackaged junk food. Same process, different store.
Solving the paradox of fund choice in investing is a tricky problem, and I have gone back and forth a few times over the years in how I approach it. But I have been playing with some new ideas lately, and I’m excited to announce a major site update that I think will make the process of building a portfolio a whole lot easier.
So if you’re ready for a break from staring at the produce, let’s talk about a better way to find the right portfolio assets.
New Assets Section
The biggest new feature is the (re)introduction of an entire additional top-line section to the site — Assets. Long time readers may remember that I’ve had that before in a few different iterations. There were various reasons for those changes, but the most important point today is that I believe helping people identify appropriate real-world index funds for a portfolio is important enough to power through the hard parts and make it work.
Portfolio Charts has always been rather unique in how it is able to translate investing returns to the currency and inflation in a dozen different countries. That’s tricky enough, but tracking appropriate ETFs quickly amplifies the complexity. US investors may love VTI, but investors in Europe have a very different list of fund options. Put it all together, and those store aisles fill up fast.
So to cut through the noise and lead people to what they need, the Assets page starts with the high-level asset classes. As an example, here’s what the stocks section looks like.
Stocks
Once you choose an asset class, it takes to you a dedicated page full of information. From technical asset definitions to links to portfolios that put the asset to productive use, there are lots of great references to point you in the right direction. But the real star of the show is the headline section on each page — Index Funds.
Here’s what the default Index Funds section for Large Cap Blend Stocks looks like.
At the top, the target market specifies the subset of large cap blend stocks that you’re interested in and the home country is where you live. In this case, both are the United States. The list then displays not just a handful of US large cap blend ETFs like I used to offer, but a reasonably comprehensive list sorted by the expense ratio.
Each fund includes the provider name, the index it tracks, the expense ratio, and also a few relevant notes (+SCB means that it’s a total market fund that also includes small caps). The ticker on the left is the identifier that you can look up to purchase the fund yourself, and it’s also a link to neutral outside fund data for more info. And in case you’re wondering, the links are not sponsored in any way.
Where it gets even more fun is when you play with the target market and home country dropdowns.
Large cap blend is a popular asset class, and there are lots of different iterations covering stocks in many different countries and regions. On the right is the home country setting that filters for funds available where you live. With both settings combined, it’s super easy to quickly see a list of (as just one example) Europe large cap blend stock ETFs in Italy.
Same asset class, but different market and fund options all conveniently sorted to help you find the most affordable ETF for your portfolio.
Pretty cool, right?
While we’re here, I’ll also point out a hidden benefit of the Assets tools that may not be immediately obvious. All of those listed indices were pre-screened to make sure that they track approximately the same thing and also are modeled within a reasonable margin of error in the Portfolio Charts tools. They’re also “clean” funds without all of the additional nonsense that fund providers love to stuff into funds that make them sound important but add no real value to investors. So they’re all quality portfolio ingredients. I did an ungodly amount of sorting through fund options over the last few months so you don’t have to.
Repeat the same process for each asset class, and it has never been easier to find an appropriate index fund for a portfolio. Pick an asset class, market, and home country, and voilà! A full list of options. It’s still important to take the time to research funds for yourself before trusting them with your money, but with the new Assets section you’re off to a huge head start.
New Charts Interface
To put the new Assets section to best use, I also made a significant overhaul to the core interface of all the interactive Charts.
The first thing you’ll notice is that there a lot more assets than before! Instead of switching the individual country stocks, bonds, and bills based on the home country setting, I opened it up so all options are available to everyone. For some people that’s probably overkill, but I have received plenty of requests for this so I’m confident that it’s useful. And I also appreciate how it clearly shows off the full breadth of Portfolio Charts data.
One particular asset that I’d like to highlight is actually a new one — Europe bills. So European investors looking for a cash option can now choose a broad EU fund rather than one in their home country. And FYI — a few portfolio translations have also been updated to use that asset.
Next, check out the Bookmarks section. Those are links for members that allow you to quickly model the same portfolio you entered in either the My Portfolio tool or the Portfolio Matrix. And for portfolio idea packrats, the portfolio links are also savable for future reference.
The interface is also much more streamlined in general, with better organization and fewer confusing labels. That is made possible by the new Assets section, because now I can just offer links to much better info than what I used to cram into the charts. And that’s where one more piece of magic happens.
See the descriptions in the Asset Allocation section? They’re also links to the appropriate asset pages.
And they’re not just any link — they also contain shortcuts to the correct index fund settings. So if you’re a Spaniard using the charts to study a portfolio that includes intermediate German bunds, the link will go straight to appropriate Germany intermediate term treasury bond funds available in Spain. Instead of spending hours shopping for ETFs or wrestling with confusing fund screener tools, I’ve already got you covered.
Combine the new Assets section and updated tools, and every chart includes not only helpful visualizations of portfolio data but also actionable next steps. After all, proper portfolio design is about more than just numbers. White papers are fine, but real-world application is what separates investing theory from reality.
Miscellaneous Improvements
Aside from the big stuff, there are lots of other small accuracy and quality of life improvements built into the new content. For example:
- The text on various charts has been updated with larger fonts that are easier to read.
- The asset allocation lists on the Portfolio pages are presented in much nicer table form, and they all have links to the new assets. Note that the links are for US portfolio definitions by default, but you can also find asset lists for investors outside of the US farther down in the performance section.
- I fixed a few international portfolio translations that had erroneous assets listed.
- The Global Market Portfolio now includes small cap blend, and the Total Stock Market Portfolio uses only large cap blend in every country instead of adding small caps for the US but nobody else.
I have been working on this for several months, so I’m sure I missed something. As always, if you spot any bugs or errors, please don’t hesitate to let me know.
Asset Selection Done Right
I could go on with increasingly detailed stuff like asset note definitions and alternative assets when certain funds aren’t available, but at some point that gets way too deep in the weeds. The best way to learn is to try it for yourself.
So instead of belaboring the details, I’ll close by talking about a related personal thesis that has long bothered me in the field of backtesting tools and influenced how I designed everything. To put it succinctly:
Most people have been unknowingly trained by the tools they use to think about fund selection all wrong.
One of the more common requests I receive is the ability to enter a specific fund ticker into the tools to chart the historical results. That is a baseline feature in several popular backtesting tools, so I totally understand the desire.
While I’m not against the idea, it does have its downsides. Besides the high cost of such data and the major problem with comparing different funds with histories of different lengths (seriously — pay attention to how other sites crop backtests to varying start years based on the inputs), I also have a fundamental issue with the mindset this particular feature naturally feeds.
From my perspective, it’s all completely backward.
Choosing an individual fund before you have any idea of the portfolio characteristics you want is like trying every single jar of salsa at the grocery store to find the absolute perfect one in taste, heat, and ingredients only to later realize after all that work that your wife is making potato salad and you forgot the potatoes. You may have found the best salsa ever made, but unless you’re drinking the whole thing tonight you missed the point entirely.
Instead of wasting time figuring out a specific fund to backtest, start with a goal in mind. In food terms, let’s say it’s a Thanksgiving meal or a birthday party. In investing, maybe you need to build a college fund for a target amount 18 years away, or invest your house down payment in something safe over the next 3 years. All of those goals require distinctly different approaches.
Next, pick a recipe that works for your goal. A stuffed turkey is very different from a cake. And a safe near-term portfolio can be very different from a long-term growth-oriented portfolio. That’s where Portfolio Charts shines. A portfolio is the financial recipe for your investments, and the charts are great for finding one that meets your needs and experimenting with how tweaking the ingredients changes the flavor.
Only once you have a goal and a recipe in mind does it finally make sense to head to the store to pick up the necessary ingredients. Judging from my own experience playing with lots of different fund screeners over the past few months, that process can still be quite challenging. The new Assets section combined with how it fits into the rest of the site is my way of trying to bridge that gap. My goal is to make Portfolio Charts the recipe book and ingredient guide all in one — a true one-stop shop for practical investing education.
So as you browse the new asset pages, don’t just think of them as curated lists of quality fund options to be poured through on their own. Instead, think of them as important components of a successful strategy. Assets are just the ingredients for the cake, not the look on your child’s face when he blows out the candles.
The right assets make the portfolio recipe, but really it’s the purpose of the recipe that matters. Seek your purpose first, and everything else will fall into place.
With the new Assets page you’ll be cooking in no time.
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