Mutual Fund Class change

Unknown
Unknown Member
edited November 2018 in Investing (Windows)
I have several mutual fund holdings in multiple retirement accounts that have been changed from Class D to Class A shares. These funds have reinvested dividends monthly for years. Mutual Fund Conversion recalculates the cost basis for each purchase but of course there are hundreds of transactions posted for each position and they are calculated to the 6th decimal place so the total number of shares does not equal the new share balance. What's wrong with simply removing the old shares and adding the new shares? These are IRA and 401k accounts so do I need accurate cost basis info? I presume not for tax purposes but yes if I want accurate rate of return calculations. A ton of work for a slight benefit in pricing!

Comments

  • Quicken Harold
    Quicken Harold Alumni ✭✭✭✭
    edited April 2018
    Hello Paul, appreciate your question.

    Which version of Quicken are you using?

    Please let us know so that we can best help you.

    Respectfully,
    ~ Quicken Harold.
    Quicken Harold
    Community Moderator
  • Unknown
    Unknown Member
    edited March 2018
    Quicken for Windows Premier 2018 R6.12 on Windows 7 Pro SP1.
    Thank you.
  • Roger M
    Roger M Member ✭✭✭✭
    edited September 2018
    Hi, Paul,
    I have the same scenario recently with a reclassified bond fund, and I believe I know exactly which mutual fund you are referring to. I also hold the fund in a tax deferred retirement account. What you suggest is exactly what I did. I removed all the shares of the old fund, and added shares of the new fund. The number of shares was slightly different, but that can be entered correctly when you add the new shares.
    Quicken Windows Premier - Subscription **** Windows 10 Home *** Quicken user since 1996
  • Unknown
    Unknown Member
    edited March 2018
    I assume you're talking about the PIMCO conversion from Class D to A.  I think it depends on how your financial institution represents it in your download.  Mine did come down as an Add Shares and Remove Shares. 

    I manually changed it to a Fund Conversion even though I have the fund in a Roth account.  I didn't want to lose the gain loss / return info.
  • Unknown
    Unknown Member
    edited May 2018
    Yes, exactly. I have two PIMCO funds which converted and the download from Fidelity was Add/Remove Shares. I believe the "correct" way to handle this is Mutual Fund Conversion but it adds so many transactions and the correction doesn't convert to the correct number of shares...all for a couple of pennies per share. I know its to my advantage but is it worth the extra "stuff and inaccuracy?
  • Unknown
    Unknown Member
    edited March 2018
    You could always use a Shares In or Out transaction to account for the small difference in the actual share balance.  
  • Roger M
    Roger M Member ✭✭✭✭
    edited November 2018
    I tried adding a mutual fund conversion transaction. It worked, in that the correct number of shares was recorded. It only resulted in about 7 transactions, since I don't have that many lots. All looked fine until I opened up the Investing tab, and looked at the graph for "Growth of $10K". It showed a HUGE spike, on the order of a 1000% return. This, of course, is not right. So, I deleted the mutual fund conversion transactions, and re-entered the Add/Remove Shares transactions. Now the graph displays correctly.

    I suppose that I don't care too much about cost basis, since this fund is held in a retirement account. But, it would be nice to show the correct rate of return before and after the conversion. I've owned the fund for a long time.
    Quicken Windows Premier - Subscription **** Windows 10 Home *** Quicken user since 1996
  • q_lurker
    q_lurker SuperUser ✭✭✭✭✭
    edited March 2018
    Paul said:

    Yes, exactly. I have two PIMCO funds which converted and the download from Fidelity was Add/Remove Shares. I believe the "correct" way to handle this is Mutual Fund Conversion but it adds so many transactions and the correction doesn't convert to the correct number of shares...all for a couple of pennies per share. I know its to my advantage but is it worth the extra "stuff and inaccuracy?

    My choice in such situations:

    Use the MF Conversion,

    Edit each Add Share transaction to reflect the desired precision (I typically want three after the decimal point),

    Round an appropriate transaction to get the correct final total number of shares,

    Edit the Remove Shares transaction to take out the overstated market value (at least as best I recall that is the other necessary correction in some Quicken releases, an edit done in the transaction list display. I am not in a position to confirm that at this time.)


    Thus my choice is to do that extra stuff. YMMV?
  • mrzookie
    mrzookie Member ✭✭✭✭
    edited March 2018
    I did the MF conversion for 2 pimco funds that have 8-10 yrs of monthly reinvestments. came out within $.01 in both cases. I lost the actual ROI % (which is too often inaccurate anyway), but retained the history. 
  • Rocket J Squirrel
    Rocket J Squirrel SuperUser, Windows Beta ✭✭✭✭✭
    edited March 2018
    Roger M said:

    I tried adding a mutual fund conversion transaction. It worked, in that the correct number of shares was recorded. It only resulted in about 7 transactions, since I don't have that many lots. All looked fine until I opened up the Investing tab, and looked at the graph for "Growth of $10K". It showed a HUGE spike, on the order of a 1000% return. This, of course, is not right. So, I deleted the mutual fund conversion transactions, and re-entered the Add/Remove Shares transactions. Now the graph displays correctly.

    I suppose that I don't care too much about cost basis, since this fund is held in a retirement account. But, it would be nice to show the correct rate of return before and after the conversion. I've owned the fund for a long time.

    Yep, I see this too, even though the Mutual Fund Conversion seemed to work perfectly. I had zero share discrepancy and it all looked fine until you made me look at the Growth of $10k graph. Pretty crazy. I have dozens of transactions (monthly reinvests for years), and don't really want to have to re-enter them. I wonder whether there's another solution. Validate and Rebuild Lots didn't help.

    image
    Quicken user since version 2 for DOS, now using QWin Premier Subscription on Win10 Pro.
  • Roger M
    Roger M Member ✭✭✭✭
    edited March 2018
    Roger M said:

    I tried adding a mutual fund conversion transaction. It worked, in that the correct number of shares was recorded. It only resulted in about 7 transactions, since I don't have that many lots. All looked fine until I opened up the Investing tab, and looked at the graph for "Growth of $10K". It showed a HUGE spike, on the order of a 1000% return. This, of course, is not right. So, I deleted the mutual fund conversion transactions, and re-entered the Add/Remove Shares transactions. Now the graph displays correctly.

    I suppose that I don't care too much about cost basis, since this fund is held in a retirement account. But, it would be nice to show the correct rate of return before and after the conversion. I've owned the fund for a long time.

    I know, that is crazy! I actually use that graph to gauge my performance against the indexes, and to look at buy & hold scenarios.
    Quicken Windows Premier - Subscription **** Windows 10 Home *** Quicken user since 1996
  • Unknown
    Unknown Member
    edited May 2018
    Thank you for all the input. In one position, the discrepancy in the total number of new shares owned is 4 millionths of a share. I own two affected funds in three accounts with monthly distributions for 5 years so about 1500 separate lots that have different amounts of shares compared to the FI record, and the newly entered lots have the date of the conversion, not the original purchase date. Doesn't this mean any performance calculation must be not valid?

    If I don't need the cost basis since this is a retirement account, and I can't get an accurate performance measure, what reason would I have for doing extensive tedious corrections?
  • Unknown
    Unknown Member
    edited March 2018
    Paul said:

    Thank you for all the input. In one position, the discrepancy in the total number of new shares owned is 4 millionths of a share. I own two affected funds in three accounts with monthly distributions for 5 years so about 1500 separate lots that have different amounts of shares compared to the FI record, and the newly entered lots have the date of the conversion, not the original purchase date. Doesn't this mean any performance calculation must be not valid?

    If I don't need the cost basis since this is a retirement account, and I can't get an accurate performance measure, what reason would I have for doing extensive tedious corrections?

    As I said...just do a Shares In or Out to get rid of the 4 millionths of a share.

    Or you could do a Transaction Type of "Adjust Share Balance" to get to where you need to be. 

    Or you could do as you proposed...just SELL all shares and BUY new shares.
  • Rocket J Squirrel
    Rocket J Squirrel SuperUser, Windows Beta ✭✭✭✭✭
    edited March 2018
    Roger M said:

    I tried adding a mutual fund conversion transaction. It worked, in that the correct number of shares was recorded. It only resulted in about 7 transactions, since I don't have that many lots. All looked fine until I opened up the Investing tab, and looked at the graph for "Growth of $10K". It showed a HUGE spike, on the order of a 1000% return. This, of course, is not right. So, I deleted the mutual fund conversion transactions, and re-entered the Add/Remove Shares transactions. Now the graph displays correctly.

    I suppose that I don't care too much about cost basis, since this fund is held in a retirement account. But, it would be nice to show the correct rate of return before and after the conversion. I've owned the fund for a long time.

    For anyone else running into this, there is a workaround. The problem is in the generated Remove Shares transaction. There's a number in there which represents either market value or cost basis of the shares, not sure which. This number is calculated wildly wrong, affecting the $10k graph. Fixing this single transaction got me a normal graph again.

    image
    Quicken user since version 2 for DOS, now using QWin Premier Subscription on Win10 Pro.
  • Roger M
    Roger M Member ✭✭✭✭
    edited March 2018
    Roger M said:

    I tried adding a mutual fund conversion transaction. It worked, in that the correct number of shares was recorded. It only resulted in about 7 transactions, since I don't have that many lots. All looked fine until I opened up the Investing tab, and looked at the graph for "Growth of $10K". It showed a HUGE spike, on the order of a 1000% return. This, of course, is not right. So, I deleted the mutual fund conversion transactions, and re-entered the Add/Remove Shares transactions. Now the graph displays correctly.

    I suppose that I don't care too much about cost basis, since this fund is held in a retirement account. But, it would be nice to show the correct rate of return before and after the conversion. I've owned the fund for a long time.

    What do those numbers indicate? What value do we set it to?
    Quicken Windows Premier - Subscription **** Windows 10 Home *** Quicken user since 1996
  • Rocket J Squirrel
    Rocket J Squirrel SuperUser, Windows Beta ✭✭✭✭✭
    edited March 2018
    Roger M said:

    I tried adding a mutual fund conversion transaction. It worked, in that the correct number of shares was recorded. It only resulted in about 7 transactions, since I don't have that many lots. All looked fine until I opened up the Investing tab, and looked at the graph for "Growth of $10K". It showed a HUGE spike, on the order of a 1000% return. This, of course, is not right. So, I deleted the mutual fund conversion transactions, and re-entered the Add/Remove Shares transactions. Now the graph displays correctly.

    I suppose that I don't care too much about cost basis, since this fund is held in a retirement account. But, it would be nice to show the correct rate of return before and after the conversion. I've owned the fund for a long time.

    It appears to be the cost basis of the removed shares. That is the only number I could find which matched after I re-entered the transaction. If you re-entered the Remove Shares transaction already, you should see the correct number there.
    Quicken user since version 2 for DOS, now using QWin Premier Subscription on Win10 Pro.
  • Jim_Harman
    Jim_Harman SuperUser ✭✭✭✭✭
    edited November 2018
    Hopefully the fix below will resolve the problem of the wild swing in the Growth of $10k graph. Back up your data file first, just in case...

    Select the Removed transaction for the old share class and look at the number in the box in the 2nd row of the Action column, below "Removed". This should be the value of your security on the date of the conversion (share price x # of shares). This "hidden" number is used in the Growth of $10k and average annual return (IRR) calculations. 

    In QWin prior to 2018, this number was often wildly wrong, # of shares squared x share price or something like that. I thought they fixed it in 2018, but maybe the problem is back.

    If the number is wrong, deleting and re-entering the Remove transaction may fix it, or you can simply type the correct number in this box and hopefully it will fix the problem.
    QWin Premier subscription
  • Jim_Harman
    Jim_Harman SuperUser ✭✭✭✭✭
    edited March 2018
    Roger M said:

    I tried adding a mutual fund conversion transaction. It worked, in that the correct number of shares was recorded. It only resulted in about 7 transactions, since I don't have that many lots. All looked fine until I opened up the Investing tab, and looked at the graph for "Growth of $10K". It showed a HUGE spike, on the order of a 1000% return. This, of course, is not right. So, I deleted the mutual fund conversion transactions, and re-entered the Add/Remove Shares transactions. Now the graph displays correctly.

    I suppose that I don't care too much about cost basis, since this fund is held in a retirement account. But, it would be nice to show the correct rate of return before and after the conversion. I've owned the fund for a long time.

    It's not the cost basis, it is supposed to be the market value on the conversion date (share price of old share class x number of shares removed). See my comment below..
    QWin Premier subscription
  • Rocket J Squirrel
    Rocket J Squirrel SuperUser, Windows Beta ✭✭✭✭✭
    edited March 2018
    Roger M said:

    I tried adding a mutual fund conversion transaction. It worked, in that the correct number of shares was recorded. It only resulted in about 7 transactions, since I don't have that many lots. All looked fine until I opened up the Investing tab, and looked at the graph for "Growth of $10K". It showed a HUGE spike, on the order of a 1000% return. This, of course, is not right. So, I deleted the mutual fund conversion transactions, and re-entered the Add/Remove Shares transactions. Now the graph displays correctly.

    I suppose that I don't care too much about cost basis, since this fund is held in a retirement account. But, it would be nice to show the correct rate of return before and after the conversion. I've owned the fund for a long time.

    All I know is that when I deleted and re-entered the Remove transaction, the number that Quicken placed in that field was the cost basis. Definitely not the market value.
    Quicken user since version 2 for DOS, now using QWin Premier Subscription on Win10 Pro.
  • Roger M
    Roger M Member ✭✭✭✭
    edited March 2018
    Roger M said:

    I tried adding a mutual fund conversion transaction. It worked, in that the correct number of shares was recorded. It only resulted in about 7 transactions, since I don't have that many lots. All looked fine until I opened up the Investing tab, and looked at the graph for "Growth of $10K". It showed a HUGE spike, on the order of a 1000% return. This, of course, is not right. So, I deleted the mutual fund conversion transactions, and re-entered the Add/Remove Shares transactions. Now the graph displays correctly.

    I suppose that I don't care too much about cost basis, since this fund is held in a retirement account. But, it would be nice to show the correct rate of return before and after the conversion. I've owned the fund for a long time.

    I agree with Rocket. I checked the number in the Removed shares transaction field, and it is definitely my cost basis, not the market value on the day of conversion. I removed the Add/Remove shares transactions, then re-entered the Mutual Fund Conversion transaction. The number in the Remove transaction field was way too high. I replaced it with my cost basis, and now the graph looks fine, as well as all the data.
    Quicken Windows Premier - Subscription **** Windows 10 Home *** Quicken user since 1996
  • q_lurker
    q_lurker SuperUser ✭✭✭✭✭
    edited March 2018
    Roger M said:

    I tried adding a mutual fund conversion transaction. It worked, in that the correct number of shares was recorded. It only resulted in about 7 transactions, since I don't have that many lots. All looked fine until I opened up the Investing tab, and looked at the graph for "Growth of $10K". It showed a HUGE spike, on the order of a 1000% return. This, of course, is not right. So, I deleted the mutual fund conversion transactions, and re-entered the Add/Remove Shares transactions. Now the graph displays correctly.

    I suppose that I don't care too much about cost basis, since this fund is held in a retirement account. But, it would be nice to show the correct rate of return before and after the conversion. I've owned the fund for a long time.

    Typically, you want a match between that field and the total of the add shares values for cost basis. That way the IRR calculAtion has the same removed value as added value and there is no effect on IRR performance. So typically, that field for the Removed Shares would be cost basis. (There are times users have wanted or needed the added cost basis to be current market valu or some other value, thus the "Typically" qualifier.).


    That is an IRR based answer I cannot currently comment about the effect on the 10K graph.
  • q_lurker
    q_lurker SuperUser ✭✭✭✭✭
    edited March 2018
    Paul said:

    Thank you for all the input. In one position, the discrepancy in the total number of new shares owned is 4 millionths of a share. I own two affected funds in three accounts with monthly distributions for 5 years so about 1500 separate lots that have different amounts of shares compared to the FI record, and the newly entered lots have the date of the conversion, not the original purchase date. Doesn't this mean any performance calculation must be not valid?

    If I don't need the cost basis since this is a retirement account, and I can't get an accurate performance measure, what reason would I have for doing extensive tedious corrections?

    "newly entered lots have the date of the conversion, not the original purchase date. Doesn't this mean any performance calculation must be not valid?"

    Though the date of the Add Shares transaction is current, within the data for the transaction is a "Date Aquired" field that will match the date that lot was actually acquired. "Edit" the transaction to see the specifics.

    As for performance calculations, it depends on which calculation you refer to. IRR aka Average Annual Return for the composite of the two fund should be accurate even though the numbers for the two funds individually may be misleading.
  • Unknown
    Unknown Member
    edited April 2018

    Hopefully the fix below will resolve the problem of the wild swing in the Growth of $10k graph. Back up your data file first, just in case...

    Select the Removed transaction for the old share class and look at the number in the box in the 2nd row of the Action column, below "Removed". This should be the value of your security on the date of the conversion (share price x # of shares). This "hidden" number is used in the Growth of $10k and average annual return (IRR) calculations. 

    In QWin prior to 2018, this number was often wildly wrong, # of shares squared x share price or something like that. I thought they fixed it in 2018, but maybe the problem is back.

    If the number is wrong, deleting and re-entering the Remove transaction may fix it, or you can simply type the correct number in this box and hopefully it will fix the problem.

    Thanks, this worked for me!
  • Unknown
    Unknown Member
    edited April 2018
    Paul said:

    Thank you for all the input. In one position, the discrepancy in the total number of new shares owned is 4 millionths of a share. I own two affected funds in three accounts with monthly distributions for 5 years so about 1500 separate lots that have different amounts of shares compared to the FI record, and the newly entered lots have the date of the conversion, not the original purchase date. Doesn't this mean any performance calculation must be not valid?

    If I don't need the cost basis since this is a retirement account, and I can't get an accurate performance measure, what reason would I have for doing extensive tedious corrections?

    Got it - I see the date acquired for tax purposes...thanks. How do you handle the discrepancies in millionths of shares on each of hundreds of share lots created by the conversion? If I sell partial positions, I'm going to have numerous loose ends where the number of shares doesn't agree with the FI.
  • q_lurker
    q_lurker SuperUser ✭✭✭✭✭
    edited April 2018
    Paul said:

    Thank you for all the input. In one position, the discrepancy in the total number of new shares owned is 4 millionths of a share. I own two affected funds in three accounts with monthly distributions for 5 years so about 1500 separate lots that have different amounts of shares compared to the FI record, and the newly entered lots have the date of the conversion, not the original purchase date. Doesn't this mean any performance calculation must be not valid?

    If I don't need the cost basis since this is a retirement account, and I can't get an accurate performance measure, what reason would I have for doing extensive tedious corrections?

    How do you handle the discrepancies in millionths of shares on each of hundreds of share lots created by the conversion? 
    I've never had this issue on a holding with "hundreds" of lots.  For the securities I have had as multi-lot holdings (perhaps 100 - 150 lot very max, monthly for ~10 years?) I would still have gone through and edited each one down to my preference on precision (0.001 share).  If needed, I would also arbitrarily choose one or two to round differently to get to the total shown by the MF family.  My preference is to match the precision shown by the MF on its most precise reporting.
  • PhilipJD
    PhilipJD Member ✭✭
    edited November 2018
    Very similar issue of Mutual Fund Class / Account Change. I have several MFs with the same company. They are investment accounts, not IRA tax deferred, so cost basis is very relevant. All of the accounts were "class changed." For each of the accounts changing, Quicken downloaded reported shares in old classes as "SoldX" at market value that date, with a $0.00 balance in the accounts after the transactions downloaded and were posted. I had to "Add Account", selected the Mutual Fund Co., Quicken went on line, found the new class funds, and downloaded transactions as "BoughtX" at the market value on the date of the conversion. Because the share market value of the new funds (in each case) was slightly (very slightly) less, the new class accounts had a few more shares than the old class accounts. The exact dollar amount, however, was the same. A further problem in researching this, re the MFC, which I tried to do, is that when I click on "Enter Transactions," not all the accounts showed the "Mutual Fund Conversion" option in the drop down list. Only a few did. The set up of the accounts were all the same, i.e., Mutual Funds, not tax deferred, single mutual fund, etc.Obviously, cost basis, historical record, re-invested amounts, return on investment, are all relevant, and very important. What to do?
  • Jim_Harman
    Jim_Harman SuperUser ✭✭✭✭✭
    edited November 2018
    Generally the way to preserve cost basis is to do a Share Class Conversion as described above.

    However I don't think it is possible to do a Share Class Conversion in a Single Mutual Fund account, because by definition it can only hold one fund.

    Is there some reason that these must be Single Mutual Fund accounts rather than regular Brokerage accounts?
    QWin Premier subscription
  • q_lurker
    q_lurker SuperUser ✭✭✭✭✭
    edited November 2018
    PhilipJD said:

    Very similar issue of Mutual Fund Class / Account Change. I have several MFs with the same company. They are investment accounts, not IRA tax deferred, so cost basis is very relevant. All of the accounts were "class changed." For each of the accounts changing, Quicken downloaded reported shares in old classes as "SoldX" at market value that date, with a $0.00 balance in the accounts after the transactions downloaded and were posted. I had to "Add Account", selected the Mutual Fund Co., Quicken went on line, found the new class funds, and downloaded transactions as "BoughtX" at the market value on the date of the conversion. Because the share market value of the new funds (in each case) was slightly (very slightly) less, the new class accounts had a few more shares than the old class accounts. The exact dollar amount, however, was the same. A further problem in researching this, re the MFC, which I tried to do, is that when I click on "Enter Transactions," not all the accounts showed the "Mutual Fund Conversion" option in the drop down list. Only a few did. The set up of the accounts were all the same, i.e., Mutual Funds, not tax deferred, single mutual fund, etc.Obviously, cost basis, historical record, re-invested amounts, return on investment, are all relevant, and very important. What to do?

    The set up of the accounts were all the same, i.e., Mutual Funds, not tax deferred, single mutual fund, etc.
    I interpret your syntax to be saying these were single Mutual fund accounts in Quicken.  If so, that is one key. 

    The other key is that it is not Quicken that made these SoldX or BoughtX transactions; that would be how your brokerage offered the transactions for Quicken to use.  I do not trust or expect brokerage to always get that level of detail right (right for me).    

    SMF accounts in Quicken are not my choice at any time.  I much prefer regular brokerage accounts which offer the user much greater flexibility.  In this case, MF Conversion would not be applicable in a SMF account because the gist of the conversion is that there are two different funds being held in the same account.  The conversion simply removes shares of one and adds shares of the second.  That is a no-go for SMF account.  

    So my first choice recommendation would be to undo the SMF setting and then do the conversion such that the same account would be used for both classes of the fund.  Doing so should allow Quicken to properly adjust for the slight share quantity and NAV change.

    If your preference is strong toward the SMF accounts, I would try to following sequence:
    • Create a new regular (non-SMF) account in Quicken for the second fund.  Make sure it is empty (no cash, no securities) to start.
    • From the original account, Enter Transactions and select the Shares Transferred between Accounts to move all current shares to the new account.  That will generate the requisite Removed Shares in the original account and effectively close it out.  
    • In the new account, execute the MF Conversion.  This will generate a Remove Shares for the original class fund and all the necessary Add Shares for each lot applicable for the new-class.
    • Still in the new account, you can now individually delete each of the transactions (Add Shares and Remove Shares) for the original class shares in that account.
    • Now that the new account has only transactions for the new class fund, you should be able to set the account properties to be a SMF account.
    • Only at that point would I enable the online connectivity for the new account.

This discussion has been closed.