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Using Unit Investment Trusts in Riskalyze (UITs)

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Riskalyze Customer Care
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Riskalyze recognizes a host of UITs in our database.  To add a UIT to a portfolio, simply use the Add Investment Field to search by name or identifier for the UIT you need.

If a particular UIT is not showing up, there are a few ways to incorporate it into your client’s portfolios manually.  Check out the video and written steps below for three options for modeling UITs in Riskalyze.

 

In This Article

Option 1: Using a Previous Series or Assigning a Proxy

The easiest option for modeling a UIT in Riskalyze if you can't locate the exact identifier is to use a similar investment as a proxy.  This can be done in one of two ways.
  • Using a Previous Series
Many UITs are created using the same “batch” of funds as older versions of that UIT. Try searching for the UIT name in the Add Investment field. Oftentimes a previous version of that UIT will be available as a substitute.
  • Setting a Proxy
Most advisors choose to assign a proxy to UITs.  For example, for a highly diversified equity UIT they may use SPY, for an Energy MLP UIT you may choose AMLP, etc. Simply click on the unrecognized UIT in Riskalyze and assign a proxy from the list or choose your own proxy by entering a symbol of your desired proxy.

1_Using_Unit_Investment_Trusts_in_Riskalyze__UITs_.png

Option 2: Creating a Custom Investment (Common)

A lot of advisors choose to use the same approach as adding alternative investments or strategies (more here).  In this process, an advisor will likely,

  • Use a UIT's fact sheet to determine what historical 6-month return and volatility (standard deviation) statistics should be entered into the dropdown
  • Simply use the UIT's historical annualized performance (divide by 2 to turn it into a 6-month number) and enter the standard deviation in the volatility input:

2_Using_Unit_Investment_Trusts_in_Riskalyze__UITs_.png

Option 3: Creating a Custom Investment (Advanced)

The most analytical advisors identify the precise 6-month probable risk range for each of their favorite UITs and then enter that risk range into the 6-month risk/return scenario as the worst case and best case.

Here's how:

  • Go to DRAFT MODELS inside Riskalyze and import the existing holdings for the UIT
    • This requires visiting the UIT company's website and exporting the existing holdings to a spreadsheet before importing them in a draft portfolio in Riskalyze.
  • Once you've imported the UIT holdings, take note of the 6-month Historical Range under the Risk Number:
    3_Using_Unit_Investment_Trusts_in_Riskalyze__UITs_.png
  • Then, go to the portfolio(s) that contain that UIT and click on the UIT to reveal the drop down.
  • In the drop-down, enter the 6-month worst case/best case figures you noted from the holdings import. Riskalyze will calculate the probable return and volatility:
    4_Using_Unit_Investment_Trusts_in_Riskalyze__UITs_.png
  • Click SAVE and you're done!

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