Bonds

[raosborne]

What is the best way to enter a security like the symbol MSK? It trades like a stock but is actually a bond with a $25 face value.

Yahoo Symbol: MSK
CUSIP: 61753R200
Maturity: 1/15/2046
Coupon: 6.45%
Distributions: Quarterly
Ex-interest date: 6/28/2010

The bond price inculdes accrued interest. So per IRS regs the purchase price (cost basis) should be adjusted...

Also does anyone know a good historical price server for this security? Yahoo has current but only limited history.

Thanks,

raosborne

[Mark]

Hi raosborne,

Are you asking how to record accrued interest paid when you bought the investment, or are you asking how to record amortization after you've purchased it?

1) Accrued Interest: When creating the investment, or entering a new buy, there is a spot to enter Accrued Interest.

2) Fund Manager does not currently calculate amortization amounts for you, but you can record them if you know the amount. Record 2 distributions, of equal/opposite amounts. I would suggest changing one of the "User defined" distribution types to be "Amortization". Do this under "Options / Distribution Labels...". Now, record a Return of Capital distribution for a positive amount, and record a negative "Amortization" distribution for the same amount. The net effect is your performance doesn't change, there is no cash flow, but you've reduced your tax cost basis by the amortization amount. This is something we're looking into adding support for in the future. We would like to be able to calculate this amount for you.

I'm not aware of where you can get historical pricing. Have you checked with your web browser on all of the current historical quote servers:

http://www.fundmanagersoftware.com/intrtv.html

[raosborne]

Thanks for the qucik response.

Specifically, I would prefer to show the security the way it shows up on the brokerage statements. In other words, number of "shares" of 100 would show up as a face value of $2500. In addition, the prices retrived are not in % of face but instead are shown as the actual $ amount. For example, the closing price yesterday was $21.61. If I set the security to bonds manually, the prices retrived are treated as % and the face amount is set to $10,000 instead of $2,500. Is there any way to change the face vaule of a bond or does the program always use $100? (If not, that would be a good feature to add.)

Since the face amount is shown incorrectly, when I put in the coupon the interest calculated is 4 times too large.

Basically, what I want to show is the correct share count (100), the prices as they are reported ($21.61) and the correct face value ($2,500) and the correct interest amounts ($0.403125 per share per quarter). Is there anyway to do this with this tool? If not, what method would get me closest to this? (The more differences there are, the more I have to explain to clients, which makes us look unprofessional.)

I am currently evaulating this software, and so far it looks good, except for this item.

Thanks,

raosborne

[Mark]

Hi raosborne,

Yes, Fund Manager assumes the face value is 100 times the number of shares for bonds. Bond support is fairly new, so this is good feedback to receive. This is something we could probably make user-adjustable fairly easily.

Given that Fund Manager does assume 100, there is no way to get all of what you're looking for. Here is a method you can consider, which will get you most of it:

Record it like a regular stock. You can record it with 100 shares, and the actual price. You can still record accrued interest paid when you bought it, just like a bond. This is simply a negative interest income distribution. For the "Income" investment properties, set it to a style of "Dividend", and enter the actual amounts, instead of having Fund Manager calculate it like a bond. The down-side to this approach is that you can't show the right "Face Value" field in a custom report.