The Allocate page displays the results of the portfolio construction process. It displays the list of securities selected on the Securities List page, and shows both the percentage weight and currency amount allocated to each. It also displays the asset class level equivalent of the security portfolio and compares it to the current allocation and target allocation. You can override the results by entering weights directly on this page. Though the client’s portfolio may consist of multiple accounts, Morningstar Office defaults to security allocation at the aggregate level. If you do not wish to make the same allocation to all accounts, click the Settings icon. The Allocate Settings dialog box opens.
If you proposed a model portfolio on the Efficient Frontier page, and did not remove any of that model portfolio’s securities from the Securities List page, the Allocate page will be completely filled in based on the proposed model portfolio.
If you proposed a model allocation on the Efficient Frontier page, and did not remove any of the securities from the associated model portfolio on the Securities List page, the Allocate page will be completely filled in based on the proposed allocation’s associated model portfolio.
If you proposed an allocation other than a model allocation or model portfolio, and the user selected securities from the Securities page, the Auto Allocate process will be run automatically when user switches to this page, and the results will be displayed.
If no allocation has been proposed, or no securities have been selected, the page will be blank.
If you opted to allocate to different accounts, click the View/Allocate to drop-down to toggle between accounts. You can also select All Accounts to view all accounts in the plan.
To add a security to the graph, click Add. The Find Securities dialog opens.
To remove a security from the graph, check its box and click the Delete button.
Click Auto Allocate to match the target asset allocation as closely as possible using the securities selected on the Securities List page. This algorithm attempts to minimize misfit and minimize tracking error. No emphasis will be placed on maximizing alpha. Proposed Portfolio section will populate on the top half of the page. To view Target and Proposed Portfolios in a Style Box Format, click Investment Style View.
Fund minimum investment amounts are also incorporated into the selection process. Results will not show an allocation to a fund which is nonzero but less than the minimum initial investment amount.
Note: If you wish to create an allocation to a particular fund which is less than its minimum investment amount (for a 401K account, for example), you can do so by directly entering the amount and adjusting other securities so that the correct total amount is allocated.
Click Save As Model to save the proposed portfolio as a model portfolio. The New Model Portfolio dialog opens.
Click Load Model Portfolio to load a model portfolio as a proposed portfolio. The Find Model Portfolio dialog opens.
Click View on Frontier to open the Efficient Frontier graph in a new window, displaying the current, target and proposed portfolios.
Click in the allocation table and type in currency amounts or percentages. The total currency amount of the portfolio as well as the amount and percentage under- or over-allocated are displayed for reference. These numbers update automatically as you type in values.
Click Reset to reset the table to the default values.