Investment clubs
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22
20. The asset register
The third important ledger kept by the Club treasurer is the Asset Register. This records the assets of the club, including cash in the bank account and its shares. The cash should match the Club's bank statement, and the shares should match the Portfolio Summary sent to the club by its stockbroker.
Click here for an example of an asset register.
Note the following:
- Risk analysis
Many treasurers divide the ledger into low, medium and high risk sections, and then list the Club's shares in the relevant section. This helps members monitor the overall risk profile of its portfolio, and compare it month by month. - Sector analysis
Within the same register, it is useful to show the different industry sectors that the portfolio contains. Again, this helps members to get a quick understanding of the shape and balance of the portfolio. - Valuation of shares
Most Clubs use the mid-price of the share on the last day of the month to calculate its selling value. - Surplus cash
Surplus cash (cash put by members into the Club's account for which no units have been allocated) belongs to members, not to the club, so it appears as a liability on the register. - Shares not yet paid for
If shares are bought towards the end of the month, they may be in the share register but not paid for. In this case enter the amount owed in the 'Due from club' item. - Unit valuation
The asset register is what enables the treasurer to produce a unit valuation. Divide the net assets of the Club by the number of units in issue, and you get the value of each unit.
At the end of each month the treasurer should send a copy of the up to date asset register to each member, along with the month's cash account and members' capital account.
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