Mutual fund conversion completely makes ROI ridiculous

Unknown

Did a mutual fund conversion since fidelity had changed my mutual fund class. It got accepted as 8 different transactions based on when i had bought the old shares. Capital gains calculation and basis works great. However the 3 year returns column now shows a ridiculously high percentage of 2458%. How can i fix it ? 

Jim_Harman

What version of Quicken are you running?

Quicken sometimes calculates the value of the shares removed in a share class conversion incorrectly. See this discussion

https://getsatisfaction.com/quickencommunity/topics/continuing-problems-with-performance-calculation...

and this one

https://getsatisfaction.com/quickencommunity/topics/qwp-2018-growth-of-10-000-chart-incorrect-after-...

Until the developers get around to fixing this problem, here is a work-around:

Back up your data file, then click on the Removed transaction to select it and look at the number in the second line under "Removed". Quicken sometimes puts a wild value here, when it should be the value of the security on the date removed, i.e   (# of shares removed) * (share price on the removal date). If the number is wrong, you can edit it to enter the correct value.

You also may need to correct the share price in the price history for the old security on the conversion date.

q_lurker

ROI (Return on investment) is a poor measure to begin within Quicken in my opinion.  Beyond that aspect, after that type of conversion (and there are other similar transactions in Quicken) you may need to be looking more at combined performance - both the old fund and the new fund in the same calculation - rather than at the two funds separately.  You can do that somewhat by customizing a portfolio view. 

You might also be better served to customize the starting date (Options / Portfolio Preferences).

Broadly speaking, I prefer Average Annual Return (IRR) as a more robust performance measure within Quicken.  That is available through portfolio views and the Investment Performance Report.  That too, has some quirks to it.  

Jim_Harman

Jim Harman said:

What version of Quicken are you running?

Quicken sometimes calculates the value of the shares removed in a share class conversion incorrectly. See this discussion

https://getsatisfaction.com/quickencommunity/topics/continuing-problems-with-performance-calculation...

and this one

https://getsatisfaction.com/quickencommunity/topics/qwp-2018-growth-of-10-000-chart-incorrect-after-...

Until the developers get around to fixing this problem, here is a work-around:

Back up your data file, then click on the Removed transaction to select it and look at the number in the second line under "Removed". Quicken sometimes puts a wild value here, when it should be the value of the security on the date removed, i.e   (# of shares removed) * (share price on the removal date). If the number is wrong, you can edit it to enter the correct value.

You also may need to correct the share price in the price history for the old security on the conversion date.

Also make sure both the old and new securities are included in the return calculation.

Jim_Harman

Jim Harman said:

What version of Quicken are you running?

Quicken sometimes calculates the value of the shares removed in a share class conversion incorrectly. See this discussion

https://getsatisfaction.com/quickencommunity/topics/continuing-problems-with-performance-calculation...

and this one

https://getsatisfaction.com/quickencommunity/topics/qwp-2018-growth-of-10-000-chart-incorrect-after-...

Until the developers get around to fixing this problem, here is a work-around:

Back up your data file, then click on the Removed transaction to select it and look at the number in the second line under "Removed". Quicken sometimes puts a wild value here, when it should be the value of the security on the date removed, i.e   (# of shares removed) * (share price on the removal date). If the number is wrong, you can edit it to enter the correct value.

You also may need to correct the share price in the price history for the old security on the conversion date.

Per q.lurker's response below, I assume you are seeing the problem in the "Av. Annual Return" column and/or the the Investing performance report.

Chuck Cobb

This reply was created from a merged topic originally titled Mutual Fund Exchange Transaction.


I'm using Quicken 2018 on Windows and I'm trying to straighten out a problem with one of my investment accounts in Quicken that is causing the return for the account to be inaccurate.  The problem is caused by a mutual fund exchange transaction where my investment company exchanged a number of shares of one fund for an equally-valued number of shares of another fund.

The transaction is recorded in Quicken as a "Remove" of the original fund and an "Add" of the new fund which I would think is the correct way to record it but the Remove transaction shows up in an Investment Performance report with a return of billions of dollars which causes the return of the account to be totally screwed-up.  Is this a bug in Quicken?  Is there another way to record this transaction that would more accurately show the return?

I have seen another post on a similar topic that recommended recording an exchange transaction as a sell and a buy to preserve the cost basis of the investment; however, I am concerned that will show up as a capital gain and there really no realized capital gain.

Rocket J Squirrel

Chuck Cobb said:

This reply was created from a merged topic originally titled Mutual Fund Exchange Transaction.


I'm using Quicken 2018 on Windows and I'm trying to straighten out a problem with one of my investment accounts in Quicken that is causing the return for the account to be inaccurate.  The problem is caused by a mutual fund exchange transaction where my investment company exchanged a number of shares of one fund for an equally-valued number of shares of another fund.

The transaction is recorded in Quicken as a "Remove" of the original fund and an "Add" of the new fund which I would think is the correct way to record it but the Remove transaction shows up in an Investment Performance report with a return of billions of dollars which causes the return of the account to be totally screwed-up.  Is this a bug in Quicken?  Is there another way to record this transaction that would more accurately show the return?

I have seen another post on a similar topic that recommended recording an exchange transaction as a sell and a buy to preserve the cost basis of the investment; however, I am concerned that will show up as a capital gain and there really no realized capital gain.

The big number in the Remove transaction is indeed a Quicken bug. It's been a while since this happened to me, but if I recall correctly, the remedy is simple.

Back up your Quicken data. Make a note of the numbers in the Remove transaction. Delete the Remove transaction and re-enter it manually.

See the links in Jim Harman's response above.

q_lurker

Chuck Cobb said:

This reply was created from a merged topic originally titled Mutual Fund Exchange Transaction.


I'm using Quicken 2018 on Windows and I'm trying to straighten out a problem with one of my investment accounts in Quicken that is causing the return for the account to be inaccurate.  The problem is caused by a mutual fund exchange transaction where my investment company exchanged a number of shares of one fund for an equally-valued number of shares of another fund.

The transaction is recorded in Quicken as a "Remove" of the original fund and an "Add" of the new fund which I would think is the correct way to record it but the Remove transaction shows up in an Investment Performance report with a return of billions of dollars which causes the return of the account to be totally screwed-up.  Is this a bug in Quicken?  Is there another way to record this transaction that would more accurately show the return?

I have seen another post on a similar topic that recommended recording an exchange transaction as a sell and a buy to preserve the cost basis of the investment; however, I am concerned that will show up as a capital gain and there really no realized capital gain.

Delete the Remove transaction and re-enter it manually.

I think you can just edit the number shown to be a rational value - typically original cost basis for the shares removed.

Jim_Harman

Chuck Cobb said:

This reply was created from a merged topic originally titled Mutual Fund Exchange Transaction.


I'm using Quicken 2018 on Windows and I'm trying to straighten out a problem with one of my investment accounts in Quicken that is causing the return for the account to be inaccurate.  The problem is caused by a mutual fund exchange transaction where my investment company exchanged a number of shares of one fund for an equally-valued number of shares of another fund.

The transaction is recorded in Quicken as a "Remove" of the original fund and an "Add" of the new fund which I would think is the correct way to record it but the Remove transaction shows up in an Investment Performance report with a return of billions of dollars which causes the return of the account to be totally screwed-up.  Is this a bug in Quicken?  Is there another way to record this transaction that would more accurately show the return?

I have seen another post on a similar topic that recommended recording an exchange transaction as a sell and a buy to preserve the cost basis of the investment; however, I am concerned that will show up as a capital gain and there really no realized capital gain.

q.lurker and I disagree on what this mystery value should be.

I think it should be the market value of the shares removed on the removal date. This feeds directly to the "Returns" number corresponding the the Removed transaction in the Investing Performance report, which for a share class conversion should equal the value of the shares added on that date. You can see this if you note that the number is the same as the ridiculously large number in the Inv. Perf. report. If you then change the number, you will see that the new number appears in the report.

For a share class conversion, the value of the shares removed should equal that of the shares added, or the conversion would affect the IRR of the combination of the two holdings.

Rocket J Squirrel

Chuck Cobb said:

This reply was created from a merged topic originally titled Mutual Fund Exchange Transaction.


I'm using Quicken 2018 on Windows and I'm trying to straighten out a problem with one of my investment accounts in Quicken that is causing the return for the account to be inaccurate.  The problem is caused by a mutual fund exchange transaction where my investment company exchanged a number of shares of one fund for an equally-valued number of shares of another fund.

The transaction is recorded in Quicken as a "Remove" of the original fund and an "Add" of the new fund which I would think is the correct way to record it but the Remove transaction shows up in an Investment Performance report with a return of billions of dollars which causes the return of the account to be totally screwed-up.  Is this a bug in Quicken?  Is there another way to record this transaction that would more accurately show the return?

I have seen another post on a similar topic that recommended recording an exchange transaction as a sell and a buy to preserve the cost basis of the investment; however, I am concerned that will show up as a capital gain and there really no realized capital gain.

Let’s agree to disagree. Deleting and re-entering the transaction causes Quicken to supply an appropriate value, whatever it is.

q_lurker

Chuck Cobb said:

This reply was created from a merged topic originally titled Mutual Fund Exchange Transaction.


I'm using Quicken 2018 on Windows and I'm trying to straighten out a problem with one of my investment accounts in Quicken that is causing the return for the account to be inaccurate.  The problem is caused by a mutual fund exchange transaction where my investment company exchanged a number of shares of one fund for an equally-valued number of shares of another fund.

The transaction is recorded in Quicken as a "Remove" of the original fund and an "Add" of the new fund which I would think is the correct way to record it but the Remove transaction shows up in an Investment Performance report with a return of billions of dollars which causes the return of the account to be totally screwed-up.  Is this a bug in Quicken?  Is there another way to record this transaction that would more accurately show the return?

I have seen another post on a similar topic that recommended recording an exchange transaction as a sell and a buy to preserve the cost basis of the investment; however, I am concerned that will show up as a capital gain and there really no realized capital gain.

To keep it simple, let me suggest that for almost all such circumstances, Jim is right and the Market Value should be used for that Remove Shares field.  He and I are in agreement that the values for the two as reflected in the Investment Performance Report should match.

Lounge time.