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 attributed to buy/sell transactions 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 you must use LUSID’s instrument event framework to correctly apply transactions representing corporate actions during a window to both holding and trading categories. If you manually book a transaction representing (for example) a dividend, LUSID only applies it to the trading category.
Note: Alternatively, you can decompose total P&L into realised and delta unrealised gain/loss. These different methodologies are not intended to be mixed 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. Note market gain/loss includes cross gain/loss:
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