unofficial microsoft.public.money FAQ and A
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How to do things in Money: Investments

Q) How can I adjust the asset allocation of my investments?

A) Money has only limited asset allocation capability and some features just plain don't work. (This much improved in Money 2007 so if this is important to you, then consider upgrading.) First, we'll review available Investment Types and Asset Classes, and then we'll look at what you can and cannot with asset allocation in various versions of Money.

Investment Type

When you first tell Money about an investment, you must assign it to one of these Investment Types:

1. Bond
2. CD or US Savings Bond
3. Equity or Index Option
4. Money Market
5. Mutual Fund
6. Stock
7. Employee Stock Option

This is a pretty comprehensive list, but if you have investments types that are not here, then the Money reports that use these types won't be very useful to you. You cannot create your own Investment Types.

Asset Class

In order to get an asset allocation report in Money, each investment must be assigned to an Asset Class. The available Asset Classes are:

1. Money-Market/Cash
2. Bond
3. Small-Cap
4. Mid-Cap
5. Large-Cap
6. Other

Again, this is a pretty good list, but if you have an investment that doesn't fit into one of these classes, you are out of luck. You can't create your own Asset Class, and every investment has to fit into a single Asset Class. Things like lifecycle funds obviously don't fit well in this scheme.

Assigning Asset Classes

Money assigns Asset Classes for everything except Stocks and Mutual Funds when the investment is created. For example, Money always assigns the "Bond" Asset Class to the "Bond" Investment Type. For stocks and mutual funds, however, there are several possible Asset Classes, so you or Money need to make a choice. Here's how it works.

Stock Asset Classes

For stocks that are listed and have a symbol, Money will automatically assign an Asset Class every time you do an online update of investment prices. You can go into the Investment Details screen and change the Asset Class, but Money will change it back at the next online update. If the stock is not listed, then online updates have no effect, and money will use whatever Asset Class you put in the Investment Details screen.

Mutual Fund Asset Classes

This is where things get weird. For mutual funds that have investments that fit into a single Asset Class, things work pretty much as you would expect. However, for mutual funds that have investments in multiple Asset Classes, things don't work at all.

Mutual Funds with a Single Asset Class

For mutual funds that are listed and you have entered a symbol, Money will automatically assign an Asset Class the first time you do an online update of investment prices. This Asset Class cannot be changed and the only way to see it is to run an asset allocation report and see where the investment shows up. Note that you cannot see this Asset Class in the investment details screen. (See below.) You can beat Money to the punch by assigning an Asset Class manually before doing an online update.

If the mutual fund is not listed or if you want to assign an Asset Class manually, then you can do so. Unlike stocks, you do not do this in the Investment Details screen. Instead, what you need to do is go to Investing | Asset Allocation and click thru the "Learn about Asset Allocation" to see the portfolio's asset allocation. The new investment will be highlighted as one without an Asset Class. If you click on it, you will be able to assign any of the allowed Asset Classes for mutual funds.

You can also use the manual process to assign an Asset Class to a listed mutual fund. To do this, you must do the manual assignment before you do an online update. Once you have assigned the Asset Class manually, it will not subsequently change when you "Update Prices Online". And, as noted above, you can't view it or change it manually either. This is different from stocks, where any manual changes will be overridden by the next Online Update.

Mutual Funds with More than One Asset Class

If you have any mutual funds that have investments in more that one Asset Class, the asset allocation features and reports will not be useful. Money will either assign a single Asset Class at the first online update or will force you to assign a single Asset Class manually. This is not immediately obvious, because the Investment Details screen for mutual funds appears to allow you to assign a mutual fund investment to a percentage over the following Asset Classes:

1. Cash
2. Bond
3. Small-Cap
4. Mid-Cap
5. Large-Cap
6. Other

This would seem to be just what is needed for "blended" or "target date" ("lifecycle") mutual funds. Unfortunately, this doesn't work. You can enter the data but:

- Money doesn't use this information in the asset allocation screens or in any reports
- You can only view the data in the data entry screen
- When you update prices online, Money will change the values you entered to other values. Frequently, these other values will bear no relation to reality and will not even add up to 100%.

As noted above, Money 2007 fixed this problem. It does allow mutual funds to be split using the Investment Details screen and the asset allocation report works properly.

Answer provided by Bill Becker. Bill also graciously provided a document with some supplemental information.

References:
umpmfaq.info: Asset Allocation

Please see this disclaimer if you are using Money 2005 or this comment if you are using Money 2006.

If this kind of stuff is important to you: