Adding ETFs to a stock portfolio

I just discovered that I can manually add ETFs to a stock portfolio. Therefore, I have added both PSQ and DBC to one of my stock portfolios to act as hedges. DBC is listed in the hedge module but PSQ is not. Both ETFs were accepted by the port as manual transactions.

Can P123 staff confirm that this will not cause a problem going forward i.e. generating portfolio performance stats etc?

Thanks,
Steve

It will work properly. It’s only not supported to the extent that research strategies will always recommend exiting manual positions, so you’ll have to continue to manage them manually.

Aaron - Although I was able to put both ETFs into the port, only one of them was counted as an open trade on the trade stats page. I think that if an ETF is put into the port but it isn’t an ETF listed as a possible hedge then it will not work properly. Am I correct in saying that?

I enjoyed the early days of P123 when stocks and ETFs could be mixed in a port- After all, some ETFs are more like stocks (having a couple stocks account for 50% of the portfolio, like EPU), while some stocks are like ETFs (Conglomerates or BRK.B for example, comprising many companies). OTOH I realize that stocks and ETFs engender different line functions, and separation probably leads to more tractable code. Combination at the book level?

Honestly, I’ve never been able to grasp how books work or how to make them work for me. The flowthrough and rebalancing.

I don’t think there’s anything like that. Can you send me the ID of the strategy that’s holding the two ETFs?

You can still do this (not sure of the plan you have to subscribe to)

Portfolio → ad to a book
ETF → add to a book

Backtest.

Also possible of Live books

Best Regards

Andreas

To add to Andreas post → remember to set the transactions costs at zero in the underlying portfolios and only set your transaction costs in the books otherwise you might well end up double-counting them.

I do that for live books. I am not sure about simulated books (since a simulated book will only use the equity curve of the underlying simulated ports). There are a few threads in the past explaining the subtleties of live books vs simulated. I can testify that live books work well. Running one live book with 6 underlying ports and another live book with 4 underlying ports.

JMH

Live books still create errors when cash is added to a port? I remember when I first created a book of my ports (one of which I had added money to). I had an amazing Sharpe ratio—one that no human (or AI) could possibly have. It felt great for a microsecond (until reality hit)! Maybe this has changed.

But if it has not changed it is subtle if you are adding only small amounts of cash to your account and could be missed. Again, maybe this has changed. And not a problem for sims where cash is not added in any case.

I use accounts for keeping track all of the live trades in my brokerage account. Seamlessly mixes ETFs and stocks with accurate statistics whether I add cash or not.

And some additional nice features in accounts.

Jim

Except for ADRs which are not updated live, but show previous day closing prices.

Thanks Andreas but this doesn’t do what I want. I have a port that I share with a number of people. It can’t be rescaling stock positions based on book rebalancing. I want everything within the port, including the stocks and ETFs.

Steve

Aaron - you are correct. I wasn’t accounting for the fact that manual trades don’t show up in the stats until the next trading day.
Thanks
Steve