How portfolios work
The portfolio functionality of the Upvest Investment API enables you to easily set up, manage and invest in portfolios as a combination of different instruments. Besides easily configuring and customising portfolios, you can also effortlessly set up recurring rebalancing strategies, trigger one-off rebalancings, and create portfolio savings plans.
Portfolio investing in the Investment API focuses on a small number of key entities. Therefore, it may be helpful to briefly discuss these entities and their relationships to each other before we begin the detailed discussion of the portfolio features provided.
| Portfolio allocation | A portfolio allocation is defined by a list of instruments and their weights. The allocation determines how the user’s money should be invested in the market, it denotes the target state of a user’s portfolio investment. Essentially, it is the object that represents the investment objective of the portfolio manager, or the user who created it; ESG, Tech, crypto, emerging markets, etc. . |
| Portfolio account | A portfolio account is specifically designed to hold the user’s portfolio investments. The account contains all the individual positions that make up the user’s portfolio. The individual positions are directly derived from the portfolio configuration of this account - or more precisely, from the portfolio allocation within this specific portfolio configuration. |
| Portfolio configuration | A portfolio configuration is the entity through which a user's portfolio investment is set up and managed. To configure a portfolio investment, you specify a portfolio allocation (and optionally a rebalancing strategy). After you create a portfolio configuration for an account, money residing in that account will be invested (& managed) according to the specified allocation (and rebalancing strategy). |
| Rebalancing strategy | A rebalancing strategy defines how the user's portfolio investment is brought to the defined target allocation. A rebalancing strategy automatically triggers a rebalancing of the user's portfolio investments based on the conditions you define. For example, the conditions can be time-based (i.e. once a year), threshold-based (i.e. percentage deviation of a position from the defined target allocation), and more. |
| One-off rebalancing | A one-off rebalancing trigger allows you or your users to initiate an immediate rebalancing of one or more portfolio investments at any time, allowing you to quickly react to changing market conditions. |
Together, these entities allow you to build dynamic investment strategies and tailor portfolios to your own capital market assumptions. In addition, you can allow your users to configure their own portfolios, tailored to each user’s specific needs and investment preferences. Finally, any portfolio created by a user can be shared and copy-traded across the platform, enabling a marketplace for portfolio ideas.
Each of these entities and how to engage with them at the API level is covered in more detail in the respective guides. The complete set of portfolio specifications consists of four guides, organised as follows:
| Guide | Title | Content |
|---|---|---|
| 1 | Enabling portfolio investments | Creating, managing, and investing in portfolios |
| 2 | Understanding portfolio orders | Managing, and handling portfolio orders end-to-end |
| 3 | Triggering a rebalancing | Creating and managing one-off rebalancing triggers |
| 4 | Setting up automated rebalancing strategies (COMING SOON) | Creating, managing, and applying rebalancing strategies |
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