The importance of a diversified portfolio is well understood in the financial sector and the complexities of modern investment strategies extend beyond publicly traded securities and exchange-traded funds (ETFs). What about the unique, unlisted opportunities, private funds, or specific superannuation options that significantly enhance your financial strategy?
Why Custom Investments?
High-net-worth individuals recognise the potential of unique, unlisted opportunities and private funds options to significantly enhance financial strategies. These custom investments (also known as Alternative Investments), including private equity and private credit, offer diversification and potentially higher returns compared to traditional stocks. As exemplified by the investment strategies of the ultra-wealthy, allocating a portion of a portfolio to these alternative assets can be a key driver of long-term financial success.
Diversiview offers a comprehensive platform for portfolio analysis and optimisation, enabling active investors, high-net worth families, and financial professionals to seamlessly integrate custom investments into their portfolios and gain a holistic view of their financial landscape.
Examples of Custom Investments
Many individuals possess assets that extend beyond the typical market offerings. These might include:
- Unlisted investment funds
- Private equity investments
- Superannuation funds
- Property / Real estate holdings
- Other business interests
Incorporating these custom investments into your portfolio provides a holistic perspective of your financial health, fostering more informed decision-making.
The Importance of Custom Investments
As demonstrated in our recent case studyāHow a wealth manager enhanced their portfolio’s CAGR by 4.65%āachieving optimal portfolio performance necessitates an in-depth evaluation of each asset. Overlooking custom investments can result in incomplete risk assessments and missed opportunities.
In the evolving world of finance, crafting a diversified portfolio can go beyond the conventional stocks and bonds. Custom investments can be integral in gaining a comprehensive understanding of one’s financial state. Here’s how you can understand the impact of custom investments on your investment strategy:
Analyse a Portfolio with Custom Investments in Diversiview
From your Diversiview dashboard, locate and click on theĀ 
Ā button on the top right-hand corner of the webpage. This will take you to the New Portfolio page. On that page, select the āCustom Investmentsā Tab to begin creating a custom investment. Here you can input specific details such as the name and code, weight in your portfolio, expected return, volatility, and correlation coefficient. For a step by step guide to adding or removing custom investments from your user profile visit our help page.
Once all listed securities and custom investments have been added, click on “Analyse Portfolio” to run the analysis.
An example
Consider an investment portfolio comprising two (2) ASX-listed ETFs and four (4) custom investments, where the custom Investments are highlighted below. :
The integration of custom investments allows you to obtain a comprehensive view of your financial position. In this example, after running the analysis it became apparent that an optimal allocation would increase the portfolio’s expected return at 11.43%. For an initial $100,000 portfolio, this strategy could result in an additional future value of $49,566 after ten years, excluding volatility and inflation considerations.
Integrating all financial holdings allows for a more accurate performance analysis of your entire financial position. This leads to a deeper understanding of how your portfolio is performing overall, ensuring all parts contribute optimally to your financial success.
Enhanced Risk Assessment
Custom investments often carry unique risk profiles. By incorporating them into your financial analysis, you can achieve a more precise assessment of your portfolio’s overall risk.
Improved Diversification
Beyond traditional asset classes, custom investments offer additional diversification. This can potentially reduce the overall portfolio volatility and improve long-term returns by spreading risk across a broader array of investments.
Technology That Helps YOU Make Decisions
Typically reflecting specific financial goals or personal interests, custom (alternative) investments enable more tailored financial planning. Including them in your analysis helps you figure out if your overall financial strategy aligns with your needs or not.
Ready to analyse your portfolio with custom investments in Diversiview? Log in or sign up to your account today and start analysing and optimising your portfolio.
