Tracking gains/losses in an investment fund

Question

Hi,

Running Quicken R68.31 on Windows 11 Pro.

I have an alternative investment fund that is a holding in a brokerage account. The brokerage account in Quicken uses the Complete tracking method, and the fund is a holding within that account. The account is at Morgan Stanley (MS), and transactions are downloaded.

The fund is detailed as a number of shares at a share price of $1, similar to how a savings fund or treasury securities fund are typically detailed. Unlike cash, however, the alternative investment fund has market gains and losses. The fund is reconciled in holdings as a number of shares at $1/share. Market value changes result in a change to the number of shares, but the price is always $1/share. Thus, changes in market value result in Quicken issuing mismatches on number of shares held.

What is Quicken's recommended method to capture market value changes in this fund? Couple of options I thought of:

* I can manually add/remove shares every month in order to keep the holdings matching the MS download, but then I'm constantly doing manual entries. 
* I could manually adjust price, but that is going to be troublesome on the far end when additional buy or sell transactions occur. It also breaks with how the fund is reported at MS.
* I could move the alternative investment fund to a Quicken account of its own (i.e., out of the existing MS account) with Simple tracking, but that would also result in a holdings mismatch in the MS account, and would also be all manual data entry.

There doesn't appear to be a transaction type that can be used to annotate gains/losses in this type of investment fund. I could use a better idea, if there is one. Please let me know your thoughts. Thanks for your help.

goldtop · Answer

Thanks for the thoughts.

I'm inclined to use my option 1 also. The primary purpose is to reconcile monthly holdings and market values, not to generate tax data. The fund fees are inclusive of that line item value that gets downloaded, so it really is just matter of adjusting shares monthly to get a match on value to the statement. There won't be dividends or fees reported in the MS statement as separate transactions, just a market value on the fund.

That fund will have its own statement separate from the monthly MS statement, and that will give me better visibility into performance and fees. There will be annual tax docs out of that fund to inform the accountant. I don't believe the fund manager provides Quicken access, so the kind of detail I would prefer is not accessible, and managing the fund details manually in Quicken is not practical.

Thanks.

q_lurker · Answer

I’d likely pursue the option 1 @goldtop offered. It is one manual transaction per month. My follow-up to that is how does MS report those ‘market gains and losses’ at year end?  Do they aggregate at year end to a taxable gain/loss or is it really just paper gains and losses.  (I suspect the latter.). Quicken has built-in categories for each — _RlzdGain and _UnrlzdGain.  Those might be useful.

My other question centers on what your needs are:

* Investment performance?
* Accurate tax date through the year?
* “ “ at year end?
* Just accurate holding (valuation) month-end?

Sceptic · Answer

@goldtop I agree with the two options that NotACPA presented.

To turn off downloading for this fund, right click on the security in your Security List and choose Edit.  And then in the settings window, uncheck "Matched with online security".  That way you won't have to contend with the placeholder mismatches.

Regardless of how you decide to update the value of this security on Quicken, Morgan Stanley will issue the appropriate tax froms that will capture the true gains/losses and taxable distributions (if any).