How do I handle this downloaded transaction?

Don Awalt

You may need your green eye shade on to help me with this one!

So here is the backdrop story...my mutual fund has created some new funds, identical in name and holdings to the fund they replace, but with some better/different cost structure for their fees. They are converting the old fund to the new fund. It has a separate account number, and has an "X Class" designation on the end of the name, but it is really the identical fund. They "move" all one's investments from the one fund to the other, albeit at a slightly different price reflecting a different cost structure I guess, and a slightly different number of shares (so the fund balance is the same). The way they do it, there is no tax transaction triggered - it is not really a sell/buy. My question is, I don't know how to process the transaction that came down (although it does not look like a transaction until accepted).

Here are the details of what I see:

I see the red flag on the fund, like transactions came down. But when I click on the account, I get a window up, which I partially show here - where Quicken asks me to confirm that this account info coming down is in fact one of the funds I already have. The top of it looks like this:



So when I click OK that it's replacing the correct fund, here is a hypothetical example of what happens to the account.....imagine before the download, "Fund WW" had 390.414 shares, at a closing price yesterday of $92.16, for a value of $35,980.55. After the investment is moved from Fund WW to "Fund WW X Class", it now has 394.610 shares at a price of $91.18, but with the identical fund/securities value - $35,980.55.

What Quicken does, is it adds a "buy" transaction. After accepting the transaction, the overall value of "Fund WW X Class is now the same, $35,980.55, but in fact looking at it, the securities value is reported as double - $71,961.10 (shares are approximately double too), and the funds cash balance is reported as negative, -$35,980.55, which equates to the correct overall fund value. This of course does not reflect what is truly in the account; shares should be 394.610, and price 91.18, and cash balance $0.

So how do I update this, not lose my transaction history, get the cash balance to $0, and have the securities value reflecting the new number of shares and price?

Thank you in advance for your help!

Tom Young

As to your "how do I use" it question, within the Account click on the Enter Transaction button, click the down arrowhead from the "Enter transaction" menu, select "Mutual Fund Conversion" and the following screen shows up:

For your example case you'd enter 1.010748 (394.610/390.414) in the "Shares of new" box.  (This screen isn't as clear as it should be since you'd probably be tempted to enter the 394.610 figure here.  But Quicken help states: "enter the number of new share class shares received for each original share class share.")

As to your "turn on/turn off" average cost question, if you're not relying at all on Quicken's accounting for basis I suppose it doesn't matter one way or the other as in either case you're not going to end up with a correct basis for the shares you own, in Quicken. 

One thing you might consider doing that would get you pretty much to the right place basis-wise would be to do your own Remove action for each fund, then do your 6 Add actions for each fund and use the average cost basis that the web site is using, or do your own calculation of average cost bases on what the web site is showing.  I'd probably use a "Date acquired" that would make all the holdings "long term", assuming that the bulk of the shares are long term.