Tracing Passive Investments Returns with KPI-Based Scorecard
The given BSC on Passive Portfolio Management strategy evaluation provides the opportunity to measure the real performance of management investing under a passive investment management approach.
Since the allocation strategy is the main factor determining the rate of return for the entire portfolio, this model allows analyzing allocation preferences and gives an opportunity to evaluate the return of the asset classes within the portfolio.
Such decomposition of the returns and clear vision of the allocation strategy ensures the objectivity and analytical viability of this BSC that gives more opportunities to measure the performance of the entire portfolio under passive management approach.
Why do business professionals choose ready-to-use KPIs?
Read Why do business professionals choose ready-to-use KPIs? to find out the answers to these questions:
- Can a business professional research KPIs on his own?
- How do I avoid typical problems with KPIs?
- Is ready-to-use KPI applicable in my niche?
- Is KPIs' price affordable?
- Can KPIs can be easily integrated in any business environment?
- How can KPIs make the difference to the business?
What are the benefits of Passive Investments metric:
- Fixed income is the major indicator to be evaluated. It is typical of passive investment portfolio.
- Fund allocation strategy is easier to develop having passive investments assessment results.
- Adoption of these KPIs is the best way to develop the so called couch potatoes investment strategy and a general passive investment BSC.
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More ideas on using Passive Investments KPI
Passive investment strategy is defined by limited number of selling and buying actions. People carrying out passive investments look for long-term appreciation of investments and restricted maintenance.
This is also called 'couch potato strategy' or buy-and-hold strategy'. Making beneficial decisions to earn from passive investment asks for sufficient amount of research, patience and a portfolio that is pretty well diversified. A typical passive investor proceeds by buying a security and preventing getting affected from short-term price fluctuations. This is because they head into the investment field with the intention of remaining their for ample time period. All these attributes make it an attractive investment option for those who can wait for long enough to have the securities give them the required amount.
Due to these specific traits associated with passive investments, a 'performance measurement and management tool' becomes a necessity.
This can be in the form of a Balanced Scorecard that has various metrics listed on it to accurately convey the conditions of progress and growth. By relying on this instrument, one can precisely take forward the aims of making profits and ensure that maximum returns are extracted.
More useful information for Financial Evaluation
Passive Investments Estimation Balanced Scoreboard Screenshots
Metrics for Financial Evaluation
This is the actual scorecard with Passive Investments Performance Indicators and performance indicators.
The performance indicators include: passive investments, equity (index funds), fixed income, asset classes return within the portfolio, historic return on money market, standard deviation of the portfolio, portfolio beta, holding period return (hpr), return on the invested capital (roic).
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