Nitrogen has over 10,000 Separately Managed Accounts (SMAs) and Unified Managed Accounts (UMAs) available for analysis. This article goes over how to find and add SMAs to accounts in Nitrogen.
IN THIS ARTICLE:
Adding SMAs to Portfolios
SMAs and UMAs can be searched and added to accounts like any other security.
Here's how:
- Start from the Advisor Dashboard
- Locate the desired Client, open their Current or Proposed Portfolio
- Click Add Account
- Select the "SMA or UMA" account type
- Click "Add Investment" and begin typing the name of the SMA or UMA to see a list of matches
- Select the appropriate match from the list.
Note: If the desired match is not available, see Creating a Custom SMA
Success! You've just added an SMA/UMA to the client portfolio. Nitrogen will now incorporate that data into the portfolio analysis. You can also include SMAs/UMAs in your Model Portfolios, so you can quantify suitability for clients, and effortlessly copy the SMAs into the proposed client portfolios that you build.
Creating a Custom SMA
Nitrogen has access to a wide variety of SMA/UMA data, but what about when a specific SMA is not readily available? Adding unidentified SMAs is a simple process.
- Open the desired Client Portfolio
- Click Add Account
- Select the "SMA or UMA" account type
- Click "Add Investment" and enter a unique name to use for the strategy
- Press enter to create a custom investment
Nitrogen will set a Fallback for analysis, based on the name of the investment (the default fallback is SPY). Click on the investment to select a different proxy or to enter custom performance data. Many SMA strategies have return and volatility statistics available for advisor review, usually found on a strategy fact sheet or marketing materials.
Tip: To enter custom return and volatility data under the "Risk / Return Scenario":
- Divide annual return by 2 to get the 6-month return.
- Divide annual volatility (standard deviation) by the square root of 2 to get the 6-month volatility.
- Refer to the article on Using Custom Investments for more.
Example: Jackpot Growth SMA
Let's say we need to model an SMA that's not in the Nitrogen database. We'll call this "Jackpot Growth SMA". Create a custom SMA following the instructions above, then click into the investment to edit return and volatility data. In this case, we chose a best case of +10% for the next six months (half of the historical average annual return since the fund’s inception) and a worst case of –6%, which was historically the worst this SMA has ever performed over a 6 month period of time. I set the correlation to “Stocks (SPY)” since it is a domestic equity fund. The resulting custom investment appears like the below, and the metrics shown are then used in the overall portfolio
Viewing an SMA in Detailed Portfolio Stats
Once you have added an SMA into your portfolio, you can click on STATS to see a detailed breakdown of the SMA including trailing returns, modeled performance, diversification, asset classification, regional exposure, risk/reward scatterplot, and size/style widgets.
Note: If you have multiple accounts within a portfolio, you may need to toggle off accounts in order to narrow down the statistics to just the SMA within a portfolio.