Investment Performance report for Bonds

Question

I have purchased various i-bonds and have tracked the interest income (earned) each month.  Each bond's opening transaction (register) includes the transferred account amount (i.e. the cost of the i-bond).   However, when i run an "Investment Performance" report, it includes that opening transaction in the performance report in the performance calculation.  How do i get the Investment Performance report to exclude the purchase price of the i-bond and only include the interest income?

Boatnmaniac · Answer

For the bond that was purchased in Jan 2023:  It shows no beginning (Jan 1) market value, right?  Does it show the $2500 bond purchase on a later date in Jan?

Quicken will return some very inaccurate average annual return rates for investments for which there is only a limited amount of time that has passed, especially when the investment was not held for the entire time period of the calculation (which in this case the entire time period started on 1/1/2023).  As more time passes, the calculated return will gradually get more accurate but it could be 6-12 months  before a reasonably accurate average annual return is provided.  One would think the return would have a simple calculation but that is not the case.  Here is the formula used by Quicken:

I suspect that if you change the report to show the return for the date of the i-bond purchase in January to the current date you will see the "N/A" return be replaced by some high percentage.

Also, if you pull the report to show the return for the last 12 months, I suspect that you will see a return that is more reflective of reality.

Here is what Quicken says about IRR calculations when pulling up reports where the time period of the report or the amount of time an investment is owned is too short:

Jonathan · Answer

Hi, thank you for the quick response.   When i run a YTD report for a bond that was purchased before 2023, the report appears accurate, for example for one such bond, the beg market value was $2,630 and the end mkt value is $2,728 for an average annual return of 11.27%.   This same report for a bond that was purchased in January 2023 for $2,500, the report shows a beg mkt of $0.00 and the ending mkt value is $2,514. Quicken reports the average annual return as "NA".  However, in this case the Bond returned $14.00 in interest.   When i report all of my bonds together, that includes the bonds purchased in 2023 (not subtotaled, the Investment report shows a highly inflated average annual return (233%).

Boatnmaniac · Answer

I'm not sure I understand what the issue is.  In order to calculate Investment Performance it must include the original purchase cost, all of the additional transactions related to that security and then also account for the current market value.  If the the initial purchase cost is not included there can be no Investment Performance calculation.

If all you want to see is the interest income earned, you might want to instead take a look at the Investment Income report.  This report does not take into account the original purchase price or the current market price unless you opt to also show the Unrealized Gains.