Unexpected mutual fund performance numbers after transfer to another account
I closed out an investment account by moving 5 equity mutual funds in kind to another account using Shares Transferred Between Accounts. The next day approximately half the shares in these funds were sold and reinvested. Afterwards, the ROI (year to date) and AvgAnnualReturn (%) 1-Year of these funds were out of whack as shown below. These numbers are for one fund for illustration purposes. The other funds are similar.
In the prior account before transfer: ROI=3.9 AAR%=25.67 Share price=99.73
In the other account after transfer: ROI=9.86 AAR%=0.0 Share price=97.38
After selling half the shares: ROI=7.27 AAR%= -99.99
I would think the Before and After transfer numbers should be the same but after the partial sale the AAR% goes totally off the chart. I would like to understand what may have caused this and how to correct it.
Comments
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When you transfer shares between accounts and you are looking at the AAR for a date range that includes the transfer date, you must include both the old and the new accounts.
Also Quicken's ROI (%) calculation is based on the Amount Invested, which does not decrease when there is a partial sale. Are you looking at the ROI for the individual security, or at account level ROI? I think Quicken's account level ROI calculation is flawed. See this lengthy discussion
QWin Premier subscription0 -
I find it easiest to diagnose or understand AAR% values using the Investment Performance Report. That tool allows you to see the details underlying transactions and you can more clearly customize to include/exclude accounts and securities.
With the report and both accounts included, on the transfer date you should see the total amounts of Returns and Investments associated with the transfer balance. Thus the removes from the old account balance against the add in the new account and there is no impact on the AAR% values.
Looking at the two accounts separately, those removes and adds can produce unexpected results.
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