Investment Performance Report Issue

Pawlu

So I noticed the other day that when I remove shares or pay a management fee etc from a particular investment account the Investment Performance Report ADDS this to my returns (the value of the shares removed or expensed)



Fund example Equity Fund ABC

Under the Investments column I have $1,500 for (Beg Mkt Value)
I purchase 4 shares for a total of $400
I removed 2 shares (for management fees) for $200

Now under the Investments Column my total is: $1,900 (Beg Mkt Value + New Shares)
Under my Returns Column my total is: $2,000 (Difference between Beg Mkt Value and End Mkt Value (for this example the gains are $300, Plus the value of the 2 shares removed $200.

Can somebody please explain to me why the report is summing up shares I removed that I no longer have, this is not a true reflection of my returns as I no longer own those shares and therefore they should not be part of the returns calculation.

Shouldn't my total returns be $1,800??

Paul .

Sherlock

If you haven't already, you may want to review: https://help.quicken.com/display/WIN/Tell+me+about+key+investment+performance+calculations+used+in+Quicken

Jim_Harman

A better way to account for management fees is to record a Sell for the shares then a MiscExp for the fee. In the MiscExp, you can assign a Category for the expense, and if you assign the expense to a security, it is not recorded as a Return in the Investment Performance Report.

Removed shares are included in the report's Return column to handle the situation for example where you gifted the shares to someone else.  

Pawlu

Thanks Jim so how do I handle a situation where in this case Sunlife charges for fees by removing shares? I understand you are suggesting Selling but that would not work as I am not getting any cash for the sale.

I have been simply processing them as a "Removed" action in the register. For other investment accounts that actually charge a fee vs removing shares I have been processing them as MiscExp, but in both cases they are being processed as a "Return" in the investment performance report. I will read the link that Sherlock posted to see if it contains some insight into this.

Jim_Harman

You edit the downloaded Removed transaction to make it a Sold for the same number of shares and the total amount equal to the fee, with the cash going to the account. This will put a positive cash balance in the account. Then you enter a MiscExp for the fees as described above.

As I said above, if you assign a security to the MiscExp transaction, the fee will will negatively affect the security's performance and will not count as a return in the Investing Performance report.

Sherlock

Pawlu said:

Thanks Jim so how do I handle a situation where in this case Sunlife charges for fees by removing shares? I understand you are suggesting Selling but that would not work as I am not getting any cash for the sale.

I have been simply processing them as a "Removed" action in the register. For other investment accounts that actually charge a fee vs removing shares I have been processing them as MiscExp, but in both cases they are being processed as a "Return" in the investment performance report. I will read the link that Sherlock posted to see if it contains some insight into this.

As @Jim_Harman explained, to include a management fee in the amount invested in a security, we need to enter a transaction providing the expense.   The Removed transaction should be replaced by a Sold and a MiscExp transaction.  These transactions will counter act each other in the calculation Quicken uses for the return. 

If you choose not to track the management fees as an expense, the Removed transaction is appropriate.

As far I can tell, the calculation appears to be correct:  $1900 + $300 - $200 = $2000

Jim_Harman

There is another recently implemented way to make the MiscExp not be counted as a Return in the IPR. If you have a Category for these fees, such as as "Mgt Fee," when you edit the Category, in the Edit Category dialog there is a confusingly named "Affects investment performance" checkbox. The rollover Help is even more confusing.

The long and short of it is that if you check that box, any investment cash transaction that uses that Category will not be included as a Return in the IPR.

Pretty obscure, eh?

Jim_Harman

Please review, comment, and vote on this Idea post
https://community.quicken.com/discussion/comment/20161068

if you would like Quicken to clarify the text related to this option. 

Pawlu

Thank you very much for your help @Jim_Harman @Sherlock going to read your posts properly and hopefully resolve this issue.

Pawlu

@Jim_Harman Thanks Jim your help & tips resolved my problem, I can confirm that now my investment reports are showing up correctly.