You can choose to decompose total P&L for a holding into:
Holding P&L (“Buy/Hold”), which is gain/loss from a change in value during a window, ignoring any transactions.
Trading P&L (“Execution”), which is gain/loss from purchases/sales during a window.
This methodology distinguishes returns generated by market movements from returns generated by trading decisions, enabling you to evaluate trader skill versus passive exposure.
Note: Alternatively, you can decompose total P&L into realised and delta unrealised gain/loss, but you shouldn’t mix the two methodologies in the same valuation report.
You can decompose total P&L in holding currency using the following metrics:
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Note: LUSID classifies P&L from carry activity, amortisation and accrual as
Other. Note carry activity is only reported if transaction types have explicitCarryorCarryAsPnlmovements.
You can decompose total P&L in portfolio currency using the following metrics, to understand the impact of exchange rate fluctuations between holding and portfolio currencies:
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