Investments, Basic
Concepts
Policies
In Durell
all types of savings and investments are referred to as “policies” (see below)
even though in reality they may be “contracts” or “accounts” (e.g. a Prudential
unitised PEP with contract ref 52546252). Each policy is owned by an address
set record, typically a “Client”, either singly or jointly (e.g. Bloggs, Fred
& Mary).
Products
In Durell all
policies are based on “products” (see below) sold by “insurance companies”
(e.g. the Prudential unitised PEP). A single product forms the basis of many
policies. Products maybe created or edited via the “Set-up” button on the Main
Menu, followed by double-clicking “Products” (see Set-up, Products and Set-up, Insurers,
General & Life). Investment products are not always based on the same
funds. One person might have the “UK Growth” fund in his PEP, while another has
25% “
Funds
Durell
allows you to hold details of the many funds (see below) used by the different
investment products (e.g. the Prudential UK Growth fund), with their bid and
offer prices at various dates, from which graphs can be drawn and growth rates
calculated (see Set-up,
Fund Prices & Graphs).
Individual
contracts can then be set-up with their specific fund details (see below).
Events
In Durell
actions to purchase, sell or switch investments are called “events” (see
below). These might include for example, the purchase of a bond via a lump sum
of £5000, or an endowment via the regular premium of £250 per month. Similarly
the sale of the investment via a lump sum would be an “event”, as would the
regular withdrawal of £500 per quarter for income. Each of these “events”
whether lump sum or repeated, is set-up in one action. Each such investment
event may be divided into a number of funds (e.g. initial lump sum purchase of
£5000 split equally between two funds).
Transactions
In Durell a
transaction is the smallest unit of investment (see below), so for example a
£5000 lump sum purchase of two funds is one event made up from two
transactions. A regular premium of £500 per month divided between two funds for
five years would create 120 individual transactions.
Transactions
May Exclude Details of Units
You cannot
enter or edit individual transactions in Durell - they can only be entered via
events. A consequence of this is that you cannot enter the number of units per
transaction when dealing with repeating events like monthly income (e.g. where
you may know the sum to withdraw, but you won’t know in advance the unit price
or number of units involved each month). You probably wouldn’t know this level
of detail anyway, and even if you did you’d probably have better things to do.
The example below shows a single-fund contract with three events…
- the initial lump-sum purchase
- income taken monthly (note the
lack of units and unit prices)
- an accumulation received after
seven months
Transactions
Not Essential
When you
re-value a contract in Durell you enter the total
number of units, the current price
and the total amount taken by the client in income and dividends (see “Investments, Adding Funds”), so
you don’t have to enter every event and transaction, as discussed in “Investments, Level of Detail”.
Data-Feed Service for
Investment Fund Prices
Fund
details can either be maintained manually, or automatically via a data-feed
service for investment fund prices. In a matter of minutes, a data-feed service
typically updates the price of over 20,000 funds each day, week or month, from
which information you can then produce automated valuations and comparative
graphs.
Maintaining Fund Prices
Manually
Updating
fund prices manually takes a long time and hence is almost certain to restrict
the number of funds for which you can hold information. Worse still, it is
likely to result in an ad-hoc naming & coding system that will prevent the
subsequent move to a data-feed service. Hence if you are intending to hold fund
details you are strongly advised to start with an automated data-feed.