Merging mutual fund accounts

Hi all,
I have 2 existing Quicken accounts (Quicken Premier 2020). One account was merged into the other via the mutual fund company. I want to merge them in Quicken. Both accounts were updated in Quicken over a 15 year period with each having different costs when bought (periodic, Dividends, Capital Gains). If I use the "Shares transferred between account" will the cost basis of the merged account be averaged into the cost basis of the new account?
Thanks, Jim
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Answers

  • Jim_Harman
    Jim_Harman SuperUser ✭✭✭✭✭
    edited April 14
    If you use Shares Transferred between Accounts, the cost basis of each tax lot of the securities in the old account will be transferred to the new account.

    There will be one Removed transaction in the old account for each security and one Added in the combined account for each tax lot of each security. If you have been reinvesting dividends for many years, you may see dozens of Added transactions. Back up your data file first and be patient, the transfer prices takes some time.

    This is exactly as it should be, there is no averaging.
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  • q_lurker
    q_lurker SuperUser ✭✭✭✭✭
    Let's not get too far ahead just yet. You say you have two "accounts"  that have been merged.  Do you mean "accounts" or are talking about two different "funds"?  (I think you mean funds.)

    In Quicken, you might have chosen (or been forced) to have each fund in its own Quicken account.  In such a case, you may have those two accounts each designated as Single Mutual Fund accounts.  So, you may be talking about both aspects.  You may have two separate funds in two separate accounts that you need to become one fund in one account with all original basis information being maintained.  

    Before I go off on the wrong path, please confirm more clearly what you actually are trying to do keeping accounts and funds as distinct entities and what your current account setup has been and needs to be.  You may need to convert shares before transferring shares ... or maybe not.  
  • vk8tx
    vk8tx Member ✭✭
    I have 10 mutual funds in the one Quicken Investment account so "two different funds" would be correct. I have dollar cost averaged (monthly) with each of the 10 funds since 1995. Therefore each fund has many date entries at various dollar amounts. In this case one Janus fund A was merged into Janus fund B. I need to merge all A transactions into B. I'm hoping to preserve to cost basis of the new B fund so I will be accurate when I sell B so I can pay only the tax required. It sounds like Jim's suggestion for Shares Transfer will accomplish this. Do you agree?
    Thanks for both replies/suggestions.
  • q_lurker
    q_lurker SuperUser ✭✭✭✭✭
    vk8tx said:
    I have 10 mutual funds in the one Quicken Investment account so "two different funds" would be correct. ... It sounds like Jim's suggestion for Shares Transfer will accomplish this. Do you agree?
    Thanks for both replies/suggestions.
    No, I don’t.  If Janus A is in the account now and you want that holding to become Janus B in the same account, that is a Mutual Fund conversion, not a Shares Transferred. 

    But further, I don’t believe MF Conversion plays well with average cost. If you have not sold any shares along the way using average cost, you may be ok. If you have sold shares, I would be looking at a single Add Shares of the Janus B fund that uses the total applicable cost that is being transferred. 
  • Jim_Harman
    Jim_Harman SuperUser ✭✭✭✭✭
    I agree if it is really all in one Quicken Account, the Mutual Fund Conversion is what you want to use.

    But the OP said he uses dollar cost averaging, which means making regular purchases. This is not the same as the Use Average Cost option, which affects sales. The Mutual Fund Conversion doses not work correctly if Use Average Cost is selected.
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  • q_lurker
    q_lurker SuperUser ✭✭✭✭✭
    I agree if it is really all in one Quicken Account, the Mutual Fund Conversion is what you want to use.

    But the OP said he uses dollar cost averaging, which means making regular purchases. This is not the same as the Use Average Cost option, which affects sales. The Mutual Fund Conversion doses not work correctly if Use Average Cost is selected.
    Agreed. I misinterpreted the “average” reference  
  • vk8tx
    vk8tx Member ✭✭
    Sorry but I don't think I've explained my problem. I have created 10 fund accounts (Janus A, Janus B, Fidelity, etc.) and bought additional shares monthly through the years (reinvesting dividends/cap gains). In my Quicken listings under "Investing" I see the 10 mutual funds. If I use "Add Account" it will show up as MF number 11. I then delete the newly added account and see my existing 10 mutual funds. I select Janus A and then "Enter Transactions" but don't see any MF Conversion. The closest I only see "Mutual Fund Name Change" so I guess I have not explained the problem. If these are actually 'accounts' is there a way to merge these? I would attach a picture if possible. I have not sold any yet but will be now that I've retired.
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  • q_lurker
    q_lurker SuperUser ✭✭✭✭✭
    edited April 15
    I have 10 mutual funds in the one Quicken Investment account
    vs
    I have created 10 fund accounts  (Janus A, Janus B, Fidelity, etc.) ...
    So in one(?) Quicken FILE, you have ten Investment ACCOUNTS each holding one of ten SECURITIES (mutual funds).

    All the shares of one security (Janus A) have been converted over to a different security (Janus B ) in the real world.  You then want to convert your shares of Janus A in your Quicken FILE to shares of Janus B and also move those shares from one Quicken ACCOUNT (MF-xx currently dedicated to holding Janus A shares) to a different Quicken ACCOUNT (MF-yy currently dedicated to holding Janus B shares). 

    What I would do --- 
    • FIRST, I would be sure I had a good backup available!
    • If the account holding the Janus A shares is identified as a Single Mutual Fund account, change that setting to no.  (See Account Details).
    • In that account, use the MF Conversion (Enter Transactions button) to convert the Janus A holdings to Janus B shares.  That will generate in that account one Remove Shares for all the Janus A shares and for each lot of Janus A shares an Add Shares adding in a lot of Janus B shares.  You will need the total number of shares of Janus B received for all of your Janus A shares in that account.
    • If that is not a 1:1 conversion (same number of shares), I would go through and edit each new Add Shares transaction to make it reflect my desired precision for number of shares.  I choose 3-digits after the decimal; some prefer 4-digits.  For me, this prevents later confusion.  Make sure the total number is shares is still correct to whatever precision your brokerage is using. 
    • In that same account, use the Share Transferred action (Enter Transactions button) to move all the Janus B shares to the 'other' account.  
    • OPTIONAL:  In the account dedicated to the Janus A holding, I would then delete all the transactions referring to Janus B.  They are now extraneous.  That would be years of Add Shares and the final Remove Shares.  This account will now end with a final transaction of Remove Shares for all Janus A shares.  On that same date, in the 'other' account, you will have all the Add Shares for the Janus B shares.  
    While I say that is what I would do, in reality I never use that model of one fund per account.  All my accounts have multiple securities in them.  IMO, it makes life (and Quicken) easier.  

    HTH 
  • vk8tx
    vk8tx Member ✭✭
    unfortunately that did not work correctly. Let me try to figure out what went wrong. I do have the needed backup.
  • vk8tx
    vk8tx Member ✭✭
    I attempted the above but rather than merging A into B the opposite was done (B merged into A). All of the merged transactions came in as 'added'. With all 'added' it appears they all lost the Investment/Capital Gain/Dividend relationship. And the entries beyond the merge date were eliminated (merge of A to B was a few years ago). I am hoping to get a way to merge A into B while keeping cost basis data (i.e., Added ShCG, Added LnCG, Added Div, Added Inv). It would be nice to keep all transactions dates for A rather than just the one merge date.
  • Jim_Harman
    Jim_Harman SuperUser ✭✭✭✭✭
    edited April 19
    "I attempted the above" is not clear because there have been several recommendations.

    I think we have established that you started with 10 separate accounts in Quicken, each of which held one mutual fund.

    Among other things, one of your mutual funds, which has many transactions due to periodic investments and reinvested dividends and capital gains, was converted from "A" shares to "B" shares some time ago. It sounds like the account that held the "A" shares was initially set up as a "Single mutual fund" account, which can only hold one mutual fund and thus does not allow conversions. Do I have this right so far?

    Before the conversion, did you also hold B shares separately, or do you only have the B shares as a result of the conversion?

    Is the conversion the only issue, or do you also want to consolidate all of these funds into one account?
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  • q_lurker
    q_lurker SuperUser ✭✭✭✭✭
    vk8tx said:
    I attempted the above but rather than merging A into B the opposite was done (B merged into A). All of the merged transactions came in as 'added'. With all 'added' it appears they all lost the Investment/Capital Gain/Dividend relationship. And the entries beyond the merge date were eliminated (merge of A to B was a few years ago). I am hoping to get a way to merge A into B while keeping cost basis data (i.e., Added ShCG, Added LnCG, Added Div, Added Inv). It would be nice to keep all transactions dates for A rather than just the one merge date.
    "I attempted the above but rather than merging A into B the opposite was done (B merged into A). " 
    Are you saying this is what happened when you tried this in Quicken?  If Janus A was merged into Janus B in the real world, your Quicken MF Conversion would be Janus A converting to Janus B.  Existing Fund = Janus A, New Fund = Janus B.

    That the shares in the lot were acquired by a reinvestment of Div, Cap Gains, Interest, etc. or by a new purchase is immaterial as far as Quicken is concerned.  I will add that this 'process' also drops out specifics like commissions; the commission is included in the cost basis carried forward, but not as a separate item for the lot.  That confuses and bothers some users for reasons I fail to understand.  So your desire to distinguish the source of the lot will not be met.  The only way I can conceive to get that distinction would be by editing the memo field of each transaction.  (Yuck!)
    "The entries beyond (after) the merge date were eliminated ..."
    I am not sure what that means.  If B was merged into A (or vice versa) a few years ago, why were there any B transactions after that point?

    The "acquisition date" for each lot is maintained.  (Edit one of the Add Shares and you can see the date.  You'll also see it on an expanded Portfolio view grouped by account.)  The transaction date is the date that the merger (conversion) took place in the real world.  Before that date you had one fund.  After that date, you had a different fund.  That matches the real world.
  • vk8tx
    vk8tx Member ✭✭
    In 1993 I purchased Quicken to track mutual funds. My first investment entry "Add Account" (+ symbol) was Janus Fund. I added Janus Mercury (now Research) and again used "Add Account" to hold the second investment. I did not see a way to add Mercury to Fund so had two accounts. Over the years I added 8 additional MF investments. Janus Mercury had a name change to Research, then Henderson Research. No problem with a name change because all transactions were the same. In 2017 Janus Fund merged into Research but I failed to try to merge them then. I am thinking of selling it so am trying to determine the cost basis for the current Research. Both Janus Fund and Research had 100's of transactions each. Since the merge Research has had yearly CG and Dividends (I'm not adding any monthly investments now).

    Jim - I have 10 investment accounts, each a MF. All accounts have been set up as an Single MF. Neither Fund or Research had conversions prior. I had both Fund and Research MF's before the merge, now I only have Research. I just want to convert (i.e., merge) the Fund MF into the Research MF while retaining the transaction data of the Fund MF. It seems easier to keep all my MF accounts separate since I will sell them at different times and want to know my cost basis for tax purposed.

    q_lurker - Yes, I did this conversion in Quicken. I thought Quicken used CG and Dividends to determine cost basis. No commissions were charged. My mistake on "entries beyond merge date". I looked at the edit data on the 'added' transactions. They all show 4/28/2017 (the date of the merge)
  • Jim_Harman
    Jim_Harman SuperUser ✭✭✭✭✭
    edited April 21
    OK, thanks for the additional details. Here is what I would do, mimicking as closely as possible what happened in real life. There are other ways to do this, but this is what I would recommend. I will call the two funds Fund and Research, you should substitute the actual names you have used in Quicken.

    You held both Fund and Research in separate single mutual fund accounts and the two funds merged into Research.

    1 - Back up in case something goes wrong

    2 - Go to the Account Details for Fund and change the Single Mutual fund option to No. This will let you do the conversion in that account.

    3 - Go to the Security Detail view for Fund, click on Edit Details, and make sure Use average cost is NOT selected.

    4 - [corrected - see below] In the Fund account, click on Enter Transactions and select Mutual Fund conversion. In the Transaction Date field, enter the date of the conversion. Enter Fund as the Existing fund and Research as the new fund. In the Shares of new box, enter the total number of shares of Research you received (contrary to what it says in the Help!).
     Enter the closing price of Research on the conversion date.

    5 - Click on Enter/Done and get some coffee, this will take a while. It will create one Removed transaction for all of the Fund shares you held and one Added for each tax lot of Research you held after the conversion. The original transactions are still there in case you want to review them, and your cost basis is preserved.

    6 - [edited to clarify] Now you will transfer the Research shares from the Fund account to your Research account. Still in the Fund account, click on Enter Transactions and pick Shares Transferred between accounts. Enter the conversion date and Research as the transfer account. Set the security name to Research and the transfer method to All. This will put one Removed in the Fund account for all your (now) Research shares and one Added in the Research account for each of the tax lots of the Research shares you are moving in. Again, this will take a while.

    After this the Fund account should be empty, but all the original Fund transactions should still be in place. If you have previously done a Share Balance adjustment or something tin the Research account to reflect your combined balance, you should delete that because you have moved the shares from the Fund account.

    Whew!
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  • q_lurker
    q_lurker SuperUser ✭✭✭✭✭
    Janus is (or was) a fund family that required the one-fund-per-account setup in Quicken in order for download transactions to take place.  

    @Jim_Harman has outlined the procedure well.  One correction I offer.

    Step 4: 
    enter the number of shares of Research you received for each share of Fund (not the total number of Research shares you received!).
    Should be to to enter the total number of shares you received, NOT the per share ratio.  That is, suppose you received 345.678 shares for the 123.456 shares you held -- enter the 345.678.

    Does your current "Research" account already include the results of this merger?  It would seem likely that it would and that the Add Shares you were looking at were downloaded at that time without cost basis from Janus/Henderson.  Since then dividends etc. have been paid out both on your original investments there and on the merged in shares.  If so, then when you are doing the current step 6, you will be duplicating those shares.  As such, you would also need to delete prior downloaded Add Shares (which lack the cost and correct acquisition date).  

    A typical Add Shares transaction -- Note the two different dates


  • Jim_Harman
    Jim_Harman SuperUser ✭✭✭✭✭
    Thanks for the correction, @q_lurker. I knew that was something odd about that entry and i went with the Help text which is apparently wrong.
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  • vk8tx
    vk8tx Member ✭✭
    I went back to the backup I had previously so have both Fund and Research separate as they were in 2017. Thus, the current Research does not have any of last weeks Merge results. Is step 6 still valid? I will start the recommended steps this afternoon and provide my results.

    With regard to the 2 dates I always wondered why the 'Date Acquired' was in there. When I added a monthly investment the 'Transaction date' (buy) and 'Date Acquired' were the same. What was I missing here?
  • q_lurker
    q_lurker SuperUser ✭✭✭✭✭
    What was I missing here?
    I think what you are missing is that Janus/Henderson provided a download after the merger.  That download only added shares as of that download date without the backup information information as to when those shares were acquired and for what price.  It may have even been treated in their download as a single lot (common approach for various financial institutions).  

    The Date Acquired is really only used for the capital gains question -- long-term or short-term?  A tangential consideration is that it provides a visual distinction for each lot.

    I would suggest Step six is valid and is preferable to the previously downloaded data from Janus/Henderson.  Step six will produce cost and date acquired for each lot held.   
  • vk8tx
    vk8tx Member ✭✭
    I have never downloaded any data from Janus or my other MF's. I always fat finger in the data when I get a statement. I had once thought of downloading from the MF companies but did not.

    Since the acquire and transaction dates, for me, were the same I often thought of suggesting to Quicken to have a transaction check box saying they were the same date.
  • q_lurker
    q_lurker SuperUser ✭✭✭✭✭
    Well my other explanation is that if you manually enter an Add Shares and do not specify a Date Acquired, it does insert the transaction date in the records as the date acquired.     
  • vk8tx
    vk8tx Member ✭✭
    I'm through step 5. Just to be sure, is step 6 performed in the Fund or Research account?
  • Jim_Harman
    Jim_Harman SuperUser ✭✭✭✭✭
    For step 6 you are still in the Fund account, which now holds shares of Research. You will transfer those shares to the Research account.
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  • vk8tx
    vk8tx Member ✭✭
    Thanks for the help so far.
    I transferred the Research shares and the Share Balance is correct. However, all Research transactions are still listed as ADDED and the Security Value is a bit over 50% higher than it should be.

    Can the Research shares be identified as they should be (i.e., Added, CG, Dividend)?

    Is there something in the combined account (Fund and ADDED Research) I need to delete to have the correct Security Value? Multiplying Share Balance times last dollar value is the Security Value I expected but the 50% higher value is listed in the lower right.
  • Jim_Harman
    Jim_Harman SuperUser ✭✭✭✭✭
    edited April 21
    As I mentioned earlier, at some point after the conversion, you may have adjusted the share balance in the Research account to match a statement, which already included your original Research shares and the converted Fund shares that you have now added to the account.

    Two things to do:

    1) Go to Edit > Preferences > Investment Transactions and make sure Show Hidden Transactions is selected. This will make any Placeholders in the account visible.

    2) In the Research account, click on Holdings and set the As of date to just before and after the conversion. You should see the total number of shares jump up to the correct number on the conversion date. Now move the As of date forward to see if there is a date when it jumps up to the incorrect value.

    3) Go to the account's transaction list (register) for that date and see if you can find a transaction - probably a Placeholder or an Added - that you entered to adjust the balance. If it matches the number of shares you just transferred into the account, you have found the problem and you should delete this transaction.

    Re: not seeing the original original Fund transactions in the Research account, that is as it should be. They are still in the (now empty) Fund account. You have moved the tax lots (positions), including the shares, acquisition dates, and cost basis,  from the Fund account to the Research account, not the original transactions.

    If you want to see your performance over a period that includes the conversion and transfer, you must include both accounts in the analysis.  
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  • q_lurker
    q_lurker SuperUser ✭✭✭✭✭
    Can the Research shares be identified as they should be (i.e., Added, CG, Dividend)?
    To reinforce Jim's answer, No.  The converted (merged) shares are identified by when they were acquired -- "as they should be".  There is nothing that says they "should be" identified by source (Added, CG, Div, etc.)


    In my snip above, all those holdings were originally VTSMX shares that were later converted to VTSAX shares.  You might note the three lots dated 12/23/97.  Those were originally acquired through reinvestments of Div, STCG, and LTCG respectively.  But even at the time, the same portfolio view would have just listed them by date.  

    In another context, reinvestments can also be treated as a dividend received and then shares bought.  There is nothing magical that a reinvestment was involved.  That the source used to acquire the lot was a dividend, capital gain, or other is just immaterial to any tax or performance computation.  
       
  • Jim_Harman
    Jim_Harman SuperUser ✭✭✭✭✭
    edited April 21
    Note that the source of the lot does matter in the year it was received, because dividends and capital gains are taxed differently. 

    But if you need that data, the original transactions are still in the old account, where they should be.

    In the year of the conversion and transfer, you would have received two 1099 forms or entries, one for the pre conversion (Fund) security showing any distributions received in the first part of the year, and one for the post conversion security. The way we have done it, the accounts and transactions in Quicken will match those forms.
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  • vk8tx
    vk8tx Member ✭✭
    I searched the Holdings the day before the Merge and days/months afterwards. I did not notice any "incorrect values" but did realize the ~50% increased Securities Value I mentioned was due to the value being based on this yesterday's closing fund value. I thought Quicken always calculated the Securities Value on the last Transaction in my account. I may have changed something these past few days causing this. Is there a way to ensure Quicken will only list a Securities Value based on the last transaction vice today's closing value? I will start entering yearly CG's and Dividends to get the account up to day. Thanks for the help with this merge query.

    One last question, for today, how can I update the shares to only show 4 digits beyond the decimal point? Some of mine show 2 while some show 6 digits beyond.
  • Jim_Harman
    Jim_Harman SuperUser ✭✭✭✭✭
    Quicken calculates the value based on the share price in the Price History. If there is no price for the As of date, it uses the most recent earlier price, which if you don't download quotes would usually be the date of the last transaction.

    If you go to the security's Security Details page and click on More, you can view and edit the price history.
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  • q_lurker
    q_lurker SuperUser ✭✭✭✭✭
    Regarding precision -- Most on-screen presentations are whatever is in the records.  Reports (as might be printed) are subject to an Edit Preferences setting for number after the decimal.  

    It is likely that the MF conversion took whatever your original holdings were (by lot, 2 decimal) and the computed share ratio turned the new holding into 6 decimal (still by lot).  My policy has always been to go through those one-by-one and reduce the 6-decimal precision to 3-decimals, still making sure I ended up with the correct total.  As OCD labor of love on my part.  
  • Jim_Harman
    Jim_Harman SuperUser ✭✭✭✭✭
    The number of shares in the lots added due to the conversion is calculated and there is no way to adjust the precision short of manually editing each transaction.

    For reports but unfortunately not the Holdings or Portfolio views, you can set the number of decimal places displayed by going to Edit > Preferences > Reports only.

    If you want to get rid of a rounding issue and make your total number of shares match your statement, you can edit a transaction and modify the number of shares slightly, letting Quicken re-calculate the share price. In your case you might want to do this to the last Added transaction from the transfer.
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