Combining Mutual Funds After a Change

R Strax

One of my Vanguard funds converted into a different fund. No shares were sold. All shares of the original fund transferred into the new fund. Now the new fund shows the shares appearing with no NAV. How does one account for these fund conversions in the new Quicken for Mac (using Version 5.16.1 (Build 516.33903.100), Mac OS 10.15.5)? I know I did this on QW in the distant past, but I don't see an option for this type of combination in QM. I sure could use some help. Thanks!

volvogirl

Is the price the same? I have Windows but When mine converted to Admiral shares I just changed the name and ticker symbol.  Or see if you have a Corporate Acquisition.

R Strax

The price is not the same. Quicken register shows a "sell" of one and a "buy" of the other on the same date, but the number of shares and thus the price is different. I did not transact a sell or buy, and obviously I don't want to record it that way for tax accounting reasons. Isn't there a category in QM for this type of transaction? I seem to recall the QW had a category that allowed me to just enter the shares of old fund and shares of new fund, and it did the rest of the accounting automatically. Is this possible in QM?

John_in_NC

I suspect you are looking for Mutual Fund conversions that was available in QWin. I can't vouch for how well worked-I have heard various success stories. 

This feature doesn't exist in QMac. When I have funds converted, I have it represented by Remove Shares of the old fund (usually pushed out by brokerage), and and Add Shares transaction with the correct cost basis for respective lot(s).

I would not keep the Sell and Buy transactions as that can tax implications as you noted.

jacobs

John_in_NC said:

Add Shares transaction with the correct cost basis for respective lot(s).

Capturing the cost basis can range from difficult to nearly impossible for a mutual fund depending on how long it's been held, because there are so many transactions at different basis costs; entering Add Shares for every purchase, dividend and capital gain in the fund can be a tedious exercise. And possibly a worthless one, unless I'm missing something…

Vanguard's default, unless you've selected otherwise, is to track investors' funds on an average cost basis. Unfortunately, Quicken Mac doesn't support average cost basis, only LIFO or FIFO. (It's one of my significant gripes with Quicken Mac.) So for me, Quicken is always going to calculate the wrong cost basis; I know I'll need to rely solely on Vanguard's calculations for tax purposes when I sell/exchange shares, and can never rely on Quicken's tax calculations. Therefore, when dealing with a conversion from Investor to Admiral shares in a fund, or a fund merger like this summer's Capital Value Fund merger into the Windsor Fund, I'm not sure there's any reason to try to enter separate lots to capture each lot's cost basis. Am I missing something?

R Strax

I agree with your reasoning. My complicating factor is that these Vanguard shares are held in a Fidelity Brokerage account, not in Vanguard (don't ask me why, combination of circumstances). Fidelity has no way to capture the cost basis change in going from investor > Admiral shares.

It would be nice if QM would put in an algorithm for this situation, similar to the QW implementation. It is not infrequent for these share classes to change, and manual calculations can be very tough.