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Q Mac 6.3.2 Changed Asset Classes of securities!!

rdrich

Just installed QMac 6.3.2. Upon opening the Brokerage table of assets see that the new version HAS CHANGED MANY ETFs AND FUNDS TO "ASSET MIXTURE" asset class.!! Why?

"Asset mixture" tells you nothing about the contents of the pool of securities or its risk category.

For example, one of the biggest pools tracking the S&P 500 is IVV, iShares S&P 500 fund. The S&P 500 is practically the definition of large-cap US stocks. To change IVV to "Asset Mixture" totally erases any concept of the risk of the securities in the pool.

On the other hand, the new version seems to leave bond funds with their previous, user-set, asset class. For example, LQD, iShares Investment Grade Bond ETF, is composed 100% of domestic fixed income securities. In the new version, LQD remains "Domestic Bond", the asset class I originally set it at.

This asset class change is one of the least explicable and possibly most naive I've seen in many years of using Q-Mac.

At the very least you could have given users the CHOICE of letting the app make this change or not.

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rdrich

Follow up: when I changed all the "Asset Mixture" securities back to where I want them, the app changes them back to Asset Mixture when I reboot. Very frustrating!

jacobs

@rdrich In the new Dashboard asset allocation panel, Quicken is using data from a third-party quote provider to "drill down" into each mutual fund/ETF to calculate the proper asset class allocation of each fund. So if you have a fund which holds 50% domestic stocks, 10% foreign stocks and 40% domestic bonds, it applied those percentages to your holdings in the fund. This is why it is changing many funds to "mixed assets"; even if a fund is 98% stocks and 2% mutual funds, it's a "mixed asset". Going forward, we should probably be content to let all mutual funds bee "mixed assets" and let Quicken categorize them appropriately.

That said, the problem we have currently is that they made this change for the new Dashboard, but they did not make the same change for the Portfolio window's asset allocation. The product manager has said this will follow; they just didn't want to change everything at once. So until version 6.4 or whenever, we're in an in-between state where the Portfolio screen asset allocation is not particularly useful.

rdrich

@jacobs thanks for the explanation. Unfortunately I do not agree that "we should probably be content to let all mutual funds (and ETF's) be mixed assets". Most index funds, for example, wouldn't fall into such a category. It irks me that Quicken is now defining the risk level of assets and not allowing us to put them in our own buckets. At the very least, they should let us overside the Quicken assignments. Both for portfolio view and the dashboard.

jacobs

"Most index funds, for example, wouldn't fall into such a category [mixed assets]."

I'd disagree; most index funds do have some mixture, even if it's something like 99% domestic stocks and 1% international stocks or cash. And if a fund is 100% of an asset class, then Quicken will allocate 100% of that security's value to the proper asset class.

My thought is that Quicken is probably actually doing the right calculation in the new Dashboard asset allocation -- but it's not showing where it's getting the values, so we're left to guess a bit, and perhaps think it's doing it wrong. So we clearly need to be able to see the asset allocation it imports for each security, and the product manager has said they will address this in a future release. Perhaps they will allow users to edit the downloaded asset allocation of a security; I'm just not sure I see why I as a user would want to override Morningstar or whoever else is providing that data very often.

Joe Guthart

I actually like what the new Quicken has done. By using a 3rd party quote provider actually give me much more value for Quicken as now I don't have to constantly go in and research what the asset mixture is for a fund. I hope they add some more of the Quicken for Windows investing features like X-Ray.

mhorney

THIS CHANGE IS UTTERLY UNACCEPTABLE!

It would be fine to have such third party look up to be the default when a new mutual fund is set up. BUT, when a user overrides this default QUICKEN must respect and maintain the user classification.

> @jacobs said:
> @rdrich In the new Dashboard asset allocation panel, Quicken is using data from a third-party quote provider to "drill down" into each mutual fund/ETF to calculate the proper asset class allocation of each fund. So if you have a fund which holds 50% domestic stocks, 10% foreign stocks and 40% domestic bonds, it applied those percentages to your holdings in the fund. This is why it is changing many funds to "mixed assets"; even if a fund is 98% stocks and 2% mutual funds, it's a "mixed asset". Going forward, we should probably be content to let all mutual funds bee "mixed assets" and let Quicken categorize them appropriately.

mhorney

I couldn't agree more. This change in Assess Class categorization is ridiculous.

> @rdrich said:

> For example, one of the biggest pools tracking the S&P 500 is IVV, iShares S&P 500 fund. The S&P 500 is practically the definition of large-cap US stocks. To change IVV to "Asset Mixture" totally erases any concept of the risk of the securities in the pool.

> At the very least you could have given users the CHOICE of letting the app make this change or not.

jacobs

mhorney said:

THIS CHANGE IS UTTERLY UNACCEPTABLE!
It would be fine to have such third party look up to be the default when a new mutual fund is set up. BUT, when a user overrides this default QUICKEN must respect and maintain the user classification.

I agree that there should be an option for users to override downloaded asset class information, or to set a security not to download it; Quicken Windows offers both options.

That said, I'd be interested to understand use cases where Quicken downloading a security's asset allocation is problematic and "utterly unacceptable". I do understand that there are securities which Quicken doesn't yet handle, such as cryptocurrencies. And there are private and international securities for which Quicken cannot download information -- but in those cases, the user's entered asset class is not changed. What are examples where Quicken pulls down the asset class mix for a security where you would want to change it from the actual values to some other value(s)?

rdrich

> @jacobs said:

> What are examples where Quicken pulls down the asset class mix for a security where you would want to change it from the actual values to some other value(s)?

@jacobs I will give you example. The one I cited earlier. It's the iShares S&P 500 index fund ETF. Yes it holds some cash, exactly 0.01% of its assets. And even that amount is collateral on the S&P futures the fund holds. In other words, the ASSET CLASS --and risk-- of the entire portfolio is "Large Cap US Stock".

Intuit is letting people who really don't know the funds' or Morningstar's data do an auto-analysis that is incorrect. To people who know market data it's a very naive attempt to help. The feature truly misstates the risk of one's portfolio.

The assignment of asset class in Q-Mac has to be a preference of either (1) user choice or (2) automatic. To those of you who want to automatically assign "Asset Mixture" to your savings, more power to you.

BTW, your comment "to change from actual values to some other values" is to not understand Morningstar's or funds' data. The "actual value" for the example I gave is "US Large Cap Stock" not "Asset Mixture".
R

jacobs

@rdrich Talking about the Asset Allocation Dashboard, in your example of a fund which is 99.99% large cap stock and 0.01% cash, Quicken is counting 99.99% of your holdings in that fund as large cap stock and 0.01% as cash. How is this incorrect, or mis-stating the risk in your portfolio? I don't think it does. If you have $100,000 in this fund, Quicken is counting $99,990 as large cap stock and $10 as cash. How is this a problem?

If you are talking about how each security is labeled in its setup window, where such a fund is now labeled as "mixed" rather than large cap, I'm saying we should be simply ignoring those labels there. The behind-the-scenes asset allocation being performed makes these labels irrelevant, except for securities where Quicken can't download the asset information. That said, we need the Quicken dashboard to show users the makeup of each asset class -- so if I click on Large Cap Stock, it currently shows just the total dollar amount, but we need it to show the securities making up that total. This allows true risk analysis and portfolio rebalancing when desired.

If you are talking about the Portfolio screen, grouped by asset class, this area is currently a mess. It's a temporary problem, according to the product manager, who says it will be updated to use the same asset allocation methodology of the dashboard in a future update. I don't know why they decided to implement this change for the Dashboard without apply it to the Portfolio screen. I believe members of the product team actually didn't understand that they were messing this up so significantly because most mutual funds and EFTs were changed to mixed assets by the Dashboard change. They definitely need to clean this up to work like the Dashboard.

rdrich

> @jacobs said:
> @rdrich Talking about the Asset Allocation Dashboard, in your example of a fund which is 99.99% large cap stock and 0.01% cash, Quicken is counting 99.99% of your holdings in that fund as large cap stock and 0.01% as cash. How is this incorrect, or mis-stating the risk in your portfolio? I don't think it does. If you have $100,000 in this fund, Quicken is counting $99,990 as large cap stock and $10 as cash. How is this a problem?

As I said, the cash in that fund is collateral for S&P 500 futures. I.e., the market risk of the entire portfolio is US large cap sticks. So tinkering with the interior asset allocation of that fund isn't quite accurate. The amount in this example is trivial.

At this time I don't care too much what they do with dashboard. But I do care about the portfolio screen and would much prefer that they not change my choice of asset class.

What would be most useful is if Q-Mac allowed us to input target ranges for each asset class and automatically calculate the amount by which we are over or under the target.

Herb A

Quicken - Fix It!