Thank you to the QWin developers

Dan Glynhampton

I made a suggestion in the forum to Modify the Investment Performance Report to Optionally Exclude Fees.  In the latest release (R25.10) a change has been included which nicely addresses that request:

Improved: Added an ‘affects investment performance’ flag at the category level to filter transactions for the Investment Performance (IRR) Report and in the Growth of $10k graph for Deposits and Withdrawals in Investing.

I've just been testing out the change by comparing the results it produces with those I manually calculated for the last financial year, and they agree exactly.

So a big thank you to the Quicken teams for addressing my request, it will make my life a lot easier!

Jim_Harman

I also experimented with this new setting and I agree with @Dan Glynhampton that it works exactly as it should, resolving longstanding issues with the Growth of $10,000. Thanks, Quicken!

The new "Affects investment performance" setting is in each Category's Edit Category dialog in the Category List and defaults to un-checked, which means that Deposits, Withdrawals, and WriteChecks do not affect the Investment Performance Report or the Growth of $10K. 

If you want expenses like advisor fees and account maintenance fees to show as a drag on investment performance, you should use special Categories for those expenses and check the box for those Categories.

BTW I found the "i" information rollover for this box to be very confusing, and the new setting is not mentioned in the "?" Help link. Also it would be useful if there was a column for this setting in the Category List.

q_lurker

"BTW I found the "i" information rollover for this box to be very confusing, "

I agree. 
The label for the check box is "Affects investment performance"

The "i" info is: "Check this box if this income or expense relates to creating investment returns (for example, fees paid to an advisor).  Cash investment transactions with these categories won't be excluded when calculating IRR and value of $10k"

I'd label the box:  "Omit from investment performance"

I'd offer -- "Check this box if you want income or expenses associated with this category to the excluded from Average Annual Return and Growth of $10K calculations.  Such an expense might be non-commission fees paid to an advisor."

I am assuming at this stage the effect applies to both portfolio view Avg Annual Return figures and Investment Performance Reports and the Growth of $10K graph, but not any other performance measures.  

The second sentence appears to be a double negative -- "won't be excluded" suggests will be included.  So a CASH investment transaction given a category checked this way will be included in the IRR calc.  I haven't thoroughly checked, but that seems backwards.

Still checking.

J_Mike

Just ran a highly simplified test.
Two brokerage accounts.
Invested $100,000 at beginning of last year.
Securities paid $1,000 in quarterly dividends ($4,000 total for yr)
Paid $1,000 brokerage fee at end of year.

Acct I - Fee categorized as Acct Fee I - without the box checked (the old way).
Acct II - Fee categorized as Acct Fee II - with the box checked (the new way).

Reports > Investing > Investment Performance for last year shows;
Acct I - Total Return of $104,000 & IRR of 4%
Acct II - Total Return of $103,000 & IRR of 3%

Looks good.! - did I miss anything?

Bottom line - Ignore the verbiage and check the box for account fees.

See screen shot

Jim_Harman

You have it right, @J_Mike.

When the box is checked, expenses in this category are not treated as Returns in the Average Annual Return (IRR) and thus the expenses cause a reduction in the performance numbers.

Also when the box is checked, cash flows in this category are reflected in the Growth of $10K chart, which you would normally only want for account fees and similar expenses.

When the box is not checked the cash flows do not affect the calculations. The box defaults to un-checked so the default is that the IRR works as it has in the past and deposits and withdrawals do not affect the Growth of $10K.

This corrects the problems in previous versions of Quicken where Deposits, Withdrawals, and WriteChks always affected the Growth of $10K calculations and there was no easy way for fees to show as a drag on performance.

Contrary to @q_lurker's recommendation above I think the label on the checkbox and the "i" text should be:

Checkbox label: "Affects investment performance" - OK as it is.

I think the "i" text and the in-product Help should say "Check this box if you want income or expenses associated with this category to affect the Average Annual Return and Growth of $10K for your investments. These expenses might be account fees or non-commission fees paid to an advisor."

q_lurker

@Jim_Harman
My objection to the label is ambiguity.  The calculation is affected either way.  I am trying to be clear (in both label and description) that checking the box means those associated transactions will be left out of, omitted from, not included in performance calculations -- specifically Average Annual Return performance.  

I'd also like the in-product help to be even more exemplary - a statement like "Checking this box for investment fees means those expenses will not be part of the overall return and the resulting Average Annual Return will be reduced."  

q_lurker

10 covid months later, I have finally offered this idea, mostly with respect to the inconsistency of Withdrawal/Deposit cash and MiscInc/MiscExp cash -- 
https://community.quicken.com/discussion/comment/20138979#Comment_20138979
Trying to be positive ... 

Bruce McFadden

Would really appreciate it if someone would point out where this flag is. I am looking at investment performance in reports and growth of $10k under Home>Main View and do not see a category drop-down?? Sorry for the slowness. :-) .

Rocket J Squirrel

Now what would be nice would be a new column in the Category List similar to the current Hide column, with a check box to indicate "Affects investment performance".

@Bruce McFadden you'll see the check box when you edit a category. So open the Category List, right-click the relevant category, and click Edit.

Bruce McFadden

Oh. OK I see it. Thanks for the assist.