Support for leveraged ETFs in Portly

Leveraged ETFs are an increasingly popular choice amongst investors who wish to increase their exposure to the markets without having to take out margin loans. One of the challenges with owning these products is that the market value of the ETF is different from the effective exposure that it gives you. Take the case of a 3x leveraged fund : if you hold 10K of this ETF, you've effectively got 30K exposure to the underlying market. If you're not careful, you can inadvertently take on more risk than you intended.

To help you manage your levered exposure, Portly allows you to specify a leverage factor when defining the security :

Portly can then use this information in several differnet ways :

Viewing leverage on the Summary tab

There are several ways you can see information about your portfolio's leverage using the summary tab

The most direct method is to look at the heatmap. By default, the heatmap automatically scales up the area of regions that have leverage greater than 1. So for example, a 3x leveraged ETF would be shown three times larger than a 1x leveraged position. At the same time, the percentage growth is scaled down by the same amount (so for example, if the ETF gained 3% over a month, the region would be coloured as if it had experienced only 1% growth). The basic idea is to represent any leveraged positions as if they were unleveraged, to make it easier to compare with other investments.

Note that you can switch this behaviour off by right-clicking on the heatmap and deselecting the relevant option. The following picture shows how the heatmap changes when you change the flag :

Note also that you can choose to group the heatmap using the leverage factor of each security. This lets you quickly separate out the performance of all 1x investments from the performance of all 2x and 3x investments, combined :

The values in the lower-left details pane can also help you monitor your risk :

Valuation - the sum of the market valuation of the security(s) that make up this position, without adjusting for leverage

Effective exposure - the sum of the market valuation of each security that makes up the position, multiplied by its leverage factor

Leverage factor - the 'average' leverage of the position (defined as effective exposure divided by valuation)

Visualising leverage using charts

You can directly plot the leverage factor of your portfolio over time. Here's the relevant menu item :

In addition, certain charts have a "show leverage ?" checkbox. This lets you choose between plotting the actual market value of a position, or its effective exposure. You'll find this option on all valuation-related charts.