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Investment Performance report for non-traded asset

Karen
Karen Member ✭✭
edited May 2018 in Investing (Windows)
QW2015 Premier - I posted this subject before the site conversion that lost my post/questions two weeks ago. SuperUser d.lurker, if you are out there this is a follow up from your answer. I only have the answer in an email....

I've been working with the Investment Performance Report on a non-traded asset
If I want to see an Asset Value "Market Value" and Performance (Investment - RtrnCap + Dividends) and an Annual Return %, I am having trouble interpreting this report. The Value affects my Net Worth and the Performance hopefully confirms my expectations. 

For my case:
Year 1
Beg Mkt Val = original investment
End Mkt Val = Beg Mkt Val - Rtrn Cap
Total (year x-x) = Beg Mkt Val + Div
*All good

Year 2
End Mkt Val = (Year 1 End Mkt Val < Year 2 RtrnCap) + Year 1 RtrnCap
Total (year x-x)  = (Year 2 Beg Mkt Val = Year 1 End Mkt Val) + (Year 2 Div + RtrnCap) + Year 2 End Mkt Val - Avg. Annual Return % is taking into account all transactions for that year, I believe, so if all I have is Div & RtrnCap it should be straightforward but the Market Value in Holdings and the End Mkt Val in the report conflict with each other.

In Holdings, I have adjusted the Price History for the dates of the RtrnCap transactions. This would be great except for that in the Performance Report, it already deducts the RtrnCap in that year, so the End Mkt Val has a double deduction. My Net Worth is now valid but the Investment Performance is not. All of the End Mkt Vals are off and therefore so are the Totals, which has to affect the Avg Return. Before changing the Price History the report made the above (Year 2) calculation which is still problematic.   

Can I get a report from Q that gives me Year xx Beg Mkt Val + Year xx Dividends < Year xx RtrnCap with a real Annual Performance for each year from the earliest year? Is Q not robust enough to handle non-traded assets? IMO, every Holding is an Asset, some have a Market Value and some do not but instead return capital of the original investment and return dividends for a gain. The CG report doesn't capture this data.

Thanks,
Karen 

 

Comments

  • q_lurker
    q_lurker SuperUser ✭✭✭✭✭
    edited May 2018
    I am around.

    First question:  How are you customizing the Investment Performance Report - By account or By Security?  

    I created a series of transactions in a test file as follows
    1/1/01 - Buy 100 shares at $10 / share for $1000 investment
    6/30 and 12/31 of that and subsequent years, Div of $10 each time, $20 for the year, 2% of the original investment,
    12/31 of that first year and each subsequent year, a RtrnCap of $10.

    So each year I get back $30 -- $20 as Div and 10 as RtrnCap.  

    Finally, I created new prices each time the RtrnCap was received. First price from the buy was $10/share.  On 12/31/01, $9.90; on 12/31/02, $9.80, on 12/31/03, $9.70

     If I view that first year by Security, I get this picture

    image
    It shows the very beginning $0 value, the purchase for $1000, the $30 cash received, and the reduced value at the end because I reduced the share price from $10 to $9.90.  Overall, a 2% return.  

    If I prepare the report by Account, I get

    image
    My account started with the $1000 as cash.  It ended the year with $30 in cash from the two distributions and $990 in security value for the total value of $1020.  Again a 2% return.  I can continue on year by year and see the same pattern.  (see footnote)

    Over the three year period, by account will show the beginning as $1000, the ending as $1060 and a 1.96% AAR. The By  security view will start at $0, show the total investments at $1000, the total returns as $1060 with the individual div and RtrnCaps listed for an AAR of 2.02% 

    So I do not see the RtrnCaps being doubly deducted.  Both the by account and by security present real values.  
     Is Q not robust enough to handle non-traded assets?
    I don't see anything in this discussion that hinges on traded or non-traded.  If the EOY valuations of the security were based on market forces (trading values), the same basic calculations would be applied.  

    IMO, every Holding is an Asset, ...
    I agree.

    ... some have a Market Value and some do not ...
    I disagree here.  Even when there is not marketplace (exchange) trading of the security, it still has value.  That value may be difficult to assess.  If I expected my hypothetical "ROC Check" to give me $30/year for the next 100 years, that can define a present value.  If I expect it to give me $30/year for 10 years, then a lump sum of $100, that leads to a different value.   

    ... but instead (some holdings) return capital of the original investment and return dividends for a gain. 
    which as I indicated can form a basis for valuation.  

    Footnote:  If you chose to withdraw the $30 of distribution payments from the account, that would not markedly affect the calculation.  Those withdrawals would still count as part of the return from the account.  The Ending Mkt Value would be reduced, but the Return column would have the same total.  The timing of the withdrawals would have some impact on the final performance percentage.  
  • Karen
    Karen Member ✭✭
    edited May 2018
    Thanks -
    I run the report by Account. There is one account with one security.

    All the Div & RtrnCap transactions are actually Transfers, so DivX and RtrnCapX are used. I haven't seen an issue with the transfers affecting the calculations on the Report. However, you say the End Mkt Val is reduced. My report has it reduced by the RtrnCapX transaction only, until I adjusted the Price History then the EMV was reduced by twice the amount of the RtrnCapX transaction.  

    I started with 3.5 shares at $10,000 each.
    image
    Added two DivX, one RtrnCapX and adjusted the Price History on 7/22/2011 by $35,000 < $301.88 = ($34,698.12/3.5shares) = $9,913.7485
    image
    Looking back at the report, the End Mkt Val is $603.76 less, but the RtrnCapX was only $301.88.

    The Dividends and Capital are Transferred to a separate account, since the investment company doesn't hold the cash. This creates a balance in the separate account that is part of Net Worth. I can't have the funds in two places; Market Value of the Security and Cash Balance in a bank account.

    If I do not update the Price History, the Market Value of the Holding remains the same as the original investment. I'm beginning to get a lot of the original capital returned so suddenly I found the Market Value of the Holding was not adjusting for these RtrnCap transactions by Q.

    Is there anything else I can do?

    I tried to run the report by Security but Q gives me a warning that it cannot provide meaningful IRR values, which, in this case, are not needed. I get an NA for AAR and the numbers do this;
    image

    Appreciate your assistance,

    Karen

  • Karen
    Karen Member ✭✭
    edited August 2016
    I've just noticed that your report is Subtotaled by Security where mine is Customized using all Accounts and only checking this Security, then Subtotaled by Year. The RtrnCap has been reduced twice in the Beg Mkt Val of the Performance for the following year, 2012, using the Subtotaled by Security option. The double reduction of RtrnCap in EMV for 2011 happens when Customized by this Account and Subtotaled by Year is used.
  • q_lurker
    q_lurker SuperUser ✭✭✭✭✭
    edited December 2016
    Karen said:

    Thanks -
    I run the report by Account. There is one account with one security.

    All the Div & RtrnCap transactions are actually Transfers, so DivX and RtrnCapX are used. I haven't seen an issue with the transfers affecting the calculations on the Report. However, you say the End Mkt Val is reduced. My report has it reduced by the RtrnCapX transaction only, until I adjusted the Price History then the EMV was reduced by twice the amount of the RtrnCapX transaction.  

    I started with 3.5 shares at $10,000 each.
    image
    Added two DivX, one RtrnCapX and adjusted the Price History on 7/22/2011 by $35,000 < $301.88 = ($34,698.12/3.5shares) = $9,913.7485
    image
    Looking back at the report, the End Mkt Val is $603.76 less, but the RtrnCapX was only $301.88.

    The Dividends and Capital are Transferred to a separate account, since the investment company doesn't hold the cash. This creates a balance in the separate account that is part of Net Worth. I can't have the funds in two places; Market Value of the Security and Cash Balance in a bank account.

    If I do not update the Price History, the Market Value of the Holding remains the same as the original investment. I'm beginning to get a lot of the original capital returned so suddenly I found the Market Value of the Holding was not adjusting for these RtrnCap transactions by Q.

    Is there anything else I can do?

    I tried to run the report by Security but Q gives me a warning that it cannot provide meaningful IRR values, which, in this case, are not needed. I get an NA for AAR and the numbers do this;
    image

    Appreciate your assistance,

    Karen

    Sorry for the delay in responding.  

    I essentially duplicated your transactions in my test file including the prices you showed.  With reference to your first snipped picture, where in your picture, the Ending value is shown as $34,369.88, my QW2014 shows $34,698.12.  Your value is 3.5 * 9913.7485 - 301.88 while mine is more simply the 3.5 * 9913.7485.  So I can see where you are getting the 'double deduction' of 301.88 and the disagreement between that presentation of Mkt Ending Value and other presentations in Quicken which I expect to show the higher value.  This certainly appears to be a difference between QW2014 (my version) and QW2015 (your version).  

    I'll be opening a "Problem" post here referencing this message.  Hopefully someone else will be able to validate this one way or the other with respect to QW2016 and possibly with respect to the beta testing of 2017.  

    One more check ask of you:  Go to a Portfolio view (Ctrl-U), probably choose a custom "Show", and customize that to include the "Average Annual Return 1 year".  You may want to custom further to this specific account and security.  Then set the As of Date 4/30/2012 (approximately one year after your purchase.  My QW2014 shows a 1 yr AAR of 4.72% and shows the Cost basis and Market value as 34,698.12 -- all numbers as I would expect.  

    If your QW2015 shows those values, that would indicate the issue is in the report calculation.  If the portfolio view shows different values, the problems would be deeper.  

    Thanks for your perseverance.
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