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QWin Premier: Mutual Fund company bought out

TVZ

My mutual fund company was bought out by another. How shall I set it up to be able to use the old share purchase history, for calculating capitol gains, etc.? Should I set up new accounts for each fund? Or just change the names, etc., on the old ones to the correct new ones? (I am using Quicken Premier 2015 for Windows)

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UKR

If this buyout is handled within the same brokerage account, you can use either of these transaction types in Quicken, provided that you haven't yet downloaded and accepted any transactions related to that buyout.

Mutual Fund Conversion
or
Corporate Acquisition (stock for stock)

You can find these Transaction Types by clicking the Enter Transactions button in the brokerage account register.

q_lurker

More specifics please -- like which fund families.

The root of the issue becomes what specifically is happening to your prior funds. Perhaps they are being left "as-is". Perhaps they are being merged into or traded into a like-styled fund in the new family. Perhaps they are forcing you to 'sell' the old funds and buy their 'new-to-you' funds. Perhaps something else. All these scenarios might require different approaches in Quicken.

The other aspect of importance would be whether your old fund family or the new fund family requires a 'one-fund-per-account' approach (aka Single Mutual Fund accounts) within Quicken.

TVZ

Thanks UKR. I don't use a broker. I just interact directly w/ the mutual fund companies.

I don't have "mutual fund converson" or "Corp. Acquisition" showing up from my "Enter Transactions" button. Would there be another option that would accomplish what I need?

TVZ

Q.Lurker, My old accounts were with Sentinel, a mutual fund company. I had accounts in several of their funds. I understand that each is being merged into a new account in a similar fund with the new company, Touchstone. I'm told that I will not, for example, have to pay capitol gains on these events--not until I sell them out of Touch. So I guess I need to know how to enter this into Quicken.

q_lurker

From your comment to ukr, it appears you have the funds currently setup in accounts that are Single Mutual Fund (SMF) accounts. That would explain why you do not find the MF Conversion or Corp Acquisition options. This is a selection under the Account Details edit screen.

First, determine Touchstone's requirements and policies for interfacing with Quicken. Ideally IMO, they would not require SMF accounts and you could have all your Touchstone holdings in one account in Quicken.

Second, Backup your data file

Option One becomes

Create the Touchstone account, but do not make the online connection nor put any shares or cash in the account.
Use Shares transferred to move current holdings into that new account. Take note that this Shares Transferred action simply generates a Remove Shares in the old account and a series of Add Shares in the new account.
Now you have a further set of choices - so you might backup again

In that new account, use the MF conversion or the Corp Acquisition transactions to change from the old fund to the new fund. I would first try the MF Conversion. Then check that the cost basis and valuations appear correct. If not, try again with the Corporate Acquisition. OR
If it is a 1:1 change, such that Sentinel A Fund becomes exactly the same number of shares of Touchstone X Fund, you would could edit each one of the Add Shares generated by the transfer such that they would be adding shares of X rather than A. This has the effect of showing that you removed shares of A from old account and added shares of X into the new account, and the X shares are showing the same basis and acquisition dates that the A shares had.

Now you can establish the online connectivity for this new account to the Touchstone sites.

Option Two - if you decide or must keep it as one account for each fund

For each existing account, change the setting to not be restricted to one fund.
Disable the online connectivity
Go through the MF Conversion or Corporate Acquisition process
Re-establish the online connectivity to Touchstone

There will be some other subtleties but that is the gist. One of the main consideration I am putting forth is to get this initial process done in Quicken before making the online connections. Quicken will transfer your basis and tax holding periods. Touchstone downloads likely will not.

TVZ

Thanks q.lurker!

As a kind of a basic user, I'd like to keep things as simple
as possible. I've always just set up singe fund accounts. I don't really use a
broker. So I'm inclined to do it that way. However, my Quicken 2015 Premier
Windows does not list "mutual fund" as an option when I try to
"add an account". (In fact, that pop-up window is kind of screwed up.
Words are missing, etc.) It does list "Brokerage", and that seems to
lead to being able to set up a mutual fund.

However when I try to do the transfer that you suggest, for
some reason my new Touchstone account (that I just set up) does not show up as
an option in the "Xfer Acct" box. It is listed among my accounts in
the main account list, but not in the "Xfer Act" dropdown in the
register. As a matter of fact, several of my accounts do not show up here. Do
you have any idea why that might be? They are not checked in the "Hidden
Accounts" list.

By the way, unfortunately Touchstone does not provide the
ability to download data to Quicken, so I guess I'll have to do that
manually...

Thnx again for your help...

q_lurker

Your Touchstone account should be added as a Brokerage Account, or as an IRA if applicable, then selecting the "Advanced Setup" to have the account associated with a something not Quicken-friendly.

In creating that Touchstone account, at the end of the process, did you identify the account as a Single Mutual Fund account? That could be a reason why it is not appearing in the Transfer Account box, though my QW2017 does not behave that way. I do see that list of transfer account alphabetical with all account (investment or not) offered. Could your Touchstone be further down the list?

If you have a comfortable setup working as SMF accounts with manual entry, you may want to give more serious consideration to my "Option Two".

TVZ

Ok, I find that if I change it from being a single mutual fund to not being one, it then appears on my Xfer Acct" list. So I will proceed w/ your option 2. However, it is in fact a single mutual fund. Is this going to be a problem? And do you have any idea why a SMF should not appear on the "Xfer Acct" list?

TVZ

I began to try to try to go through the MF Conversion or Corporate Acquisition process, as you suggest in option 2. However, neither of those appear in my "Enter transaction" drop-down list. I have "stock split", "Return of Capitol", and "Shares transferred between accounts". Would any of those work? Or do I do the "MF Conversion or Corporate Acquisition process" some other way?

Thank you again for your help with this!

UKR

Change all your investment accounts from Single Mutual Fund to regular investment accounts. That won't affect your existing transactions and, most likely, solve all your other issues.

q_lurker

@TVZ:
First SMF accounts:
Single Mutual Fund accounts are a construct within Quicken whereby the account is totally restricted throughout all its history to only involve one mutual fund. Never any cash. Never a second fund. This account structure with its restrictions fits for some mutual fund family download setups and for some users. The primary early user adherents seemed to like the fact that the account transaction list included a Share Balance column rather than a Cash Balance column. The Share Balance column seemed to make it easier to 'reconcile' the Quicken transactions list with the transaction list summary produced by the mutual fund company.

There is no real problem with using a general brokerage account in place of a SMF account. Indeed, I contend that the greater flexibility of the general brokerage account is a benefit over the restrictions applied to the SMF account. Some years ago, Quicken also took the step of adding the Share Balance column to the general account, such that the perceived benefit of the SMF account went away.

It is possible that for your version of Quicken, they had a restriction correlated with the shares being transferred and the SMF account. For example, if you tried to transfer shares of "B" into an SMF account that was only allowed to have shares of "A", the transfer would not make sense. That "A" share SMF account would not be allowed to have shares of "B", so that account should not be presented as an option. But as I further indicated, that was not exactly the way I saw my QW2017 behaving. So while there can be a rationale for what you are seeing, I may not be offering the proper rationale.

Now back to your case:
You (apparently) already have SMF accounts set up for your current Sentinel holdings and they are working to your basic satisfaction. If you remove the SMF limitation from those accounts, then those accounts will be able to have more than one asset owned in the account. For you, that would mean in past history, the account would have Sentinel shares and going forward the same account would have Touchstone shares.

Once you have removed the SMF limitation from those accounts, your will have the opportunity ti use the MF Conversion or Corporate Acquisition transactions to execute the changeover from Sentinel to Touchstone.

Now I don't know how you have named the accounts involved. I have seen users who named the "Account" the same as the "Security" held within the account. Shares of the "Sentinel A" fund were held in an account named "Sentinel A". This has tended to confuse the users to not understand the difference between an account and a security. If you have found yourself in this boat, it would be a prime opportunity to rename the account to something else.

volvogirl

FWIW.....I used to set up each fund as a SIngle Mutual Fund in a separate account. Even funds at the same place. I have several Vanguard funds and they are each in separate accounts. Be sure you are clear on accounts vs the securities and funds. I wish I hadn't done it that way. I wish I just had one Vanguard account with all the funds inside it. Now I have to jump around all the time.

But when I transferred my IRA to Vanguard I did make one IRA account and all the funds are in it. Much nicer. That is for the ACCOUNT.

Now for securities I have done what q.lucker says Not to do. I also setup each Security/fund with a separate name. Don't remember why. So I have like

VG GNMA (in a Vanguard GNMA Account)

VG GNMA - husband IRA (in Husband IRA account)

VG GNMA - wife IRA (in wife IRA account)

volvogirl

TVZ

I guess I have always set up Quicken with
one security per account (I had no idea there was any alternative); and I'm
just old enough that if possible, I'd like to keep doing it the same way.

So I set up my new Touchstone account.
Both it and the old Sentinel account are not checked as single mutual funds. So
now I'm ready to move everything from the old one to the new one. However, I do
not see "Mutual Fund Conversion" or "Corporate Acquisition"
in the Action dropdown. I tried "Shares sold and transferred".
However, it just showed up in the Touchstone account as a dollar amount; not
shares. Can I do it this way, and if so, how?

Thank you very much for your patient
explanations. Sorry for the difficulty.

q_lurker

a) to make sure we are on the same page:

I am trying to make this point because while you say they are not SMF accounts, they are behaving as SMF accounts (no MF conversion or Corp Acq options), I suppose it is possible that if you are changing that setting (yes to no), you might need to exit and restart Quicken to get everything adjusted.

b) MF Conversion and Corp Acquisition options are only available through the Enter Transactions button. They are not available through the Actions column pull-down selections. Maybe that is the disconnect.

c) Somewhat keeping to the one-fund / one-account approach (with a variation), I would consider:
1) making sure the setting on the existing Sentinel account is No
2) at which point you SHOULD have the Corporate Acq and MF Conversion options available
3) which you use to convert the Sentinel shares to the Touchstone shares within that original account.
While this violates the 1:1 setup directly, for all practical purposes you continue as you have been operating. And you have half the number of accounts to deal with, you don't close any accounts, you don't hide any accounts. Overall, it seems simplest to me.

The trick seems to be getting the MF Conversion and Corp Acq options under the No setting. Should be simple, but hasn't been so far. (ref. point b again).

d) If you do still want the individual Sentinel and Touchstone ACCOUNTS, I think you are still going to need to get the MF Conversion or Corp Acq options appearing.

A comment here about the objective: You (presumably) have a bunch of lots of the Sentinel fund bought at different times at different prices, perhaps dividend reinvestment, perhaps a payroll deduction, perhaps disciplined savings. As you convert these to the Touchstone shares, the IRS is allowing you to transfer the cost basis and acquisition dates of those Sentinel share to the like-value of Touchstone shares. If you bought 1.234 shares of the Sentinel Fund on 1/31/17 for $10, we want your Touchstone holding to reflect that you acquires 0.752 shares of their fund on 1/31/17 for $10. The share quantity may be different and the price/share different, but the total cost basis and the acquisition date are the same. So what we are trying to get to is a bunch of Add Shares transactions somewhere that represent acquiring Touchstone fund shares for each time you actually acquired Sentinel fund shares. that is what both the MF Conversion and the Corp Acq transactions are geared to produce.

So to get to the above structure, I'd see doing c) followed by a Shares transferred of Touchstone shares to the Touchstone account.

If desired at that point, you could do some 'cleanup' work deleting what amount to extraneous transactions. But let's get you to a working point before worrying about those steps.

unknown

In a paper world there is not much difference for your choice of each MF as an account OR setting up one account for each MF company.. You just add another piece of paper to your paper trail. In the new internet world, "they" have decided how you should do such things and "they" have provided a method for doing it.

I am an early Quicken user and an early PC user (back to the days before there was an internet). I fought "them" for a long time. I have given in and I find that using the method "they" have settled on makes things a lot easier. Imagine that, you can teach an old dog new tricks.

unknown

No offense, I hope

TVZ

Ok, I guess my latest problem was that I was not using the
Enter Transactions button.

So I did a Mutual Fund Conversion and it removed all shares;
then added them back purchase by purchase, for each purchase that had originally been made. That seemed good, but I
see that all of those purchases are now dated with today's date. Shouldn't they
reflect the original purchase dates? I don't know a lot about this stuff, but
for things like short- vs long-term capital gains, don't they need to be dated
correctly?

volvogirl

Are you sure? I have Q2013 and they are there. Scroll down the box. They might not show up if your Account is set up as a Single Mutual Fund. You can change that to NO. The SMF designation is limited in what you can do. A SMF can only hold 1 security in it and no cash. If it is a SMF you should be able to edit the account and change it. There might be a yes or no box for Single Mutual Fund. In the account, go to Account Actions - - Account Overview.In the Account Attributes pane, click on "Yes" alongside "Single Mutual Fund?".

unknown

Yes! Another reason for Just one Account for the whole Mutual Fund Company. Quicken and the new Mutual Fund Company could have done it for you. (Sorry, I am just rubbing it in.)

I bet I am older that you >80.

volvogirl

Here are a couple screen shots I saved for SMF.

UKR

> " all of those purchases are now dated with today's date."
The original purchase date and information is kept under the covers and will show on some reports and views.
AFAIK ... nothing to worry about.

TVZ

I think you're right, UKR! I did a test sale & capital gains report. Amazing, I think I'm ready to continue.

Thanks so much to all who helped. The time & effort that are evident are amazing. Do you gurus get anything out of this, other than "points"? Seems like Quicken should be paying you...