ROI Yield Report Glitch?

[elliots]

Mark,

OK, I'll give you the math and the result is "correct." However, I still believe that in this situation the numbers are really misleading/meaningless. I hope you will continue thinking about how to get NA in there when appropriate.

I do think the foreign tax is also a problem. It should not reduce the return on the specific investment -- the full dividend should count toward the return. You're making investments with foreign tax withheld the only one's in FM calculating an after-tax yield. The FT should be treated as a withdrawal from the overall portfolio. The broker is paying the US out of your account on your behalf. You (usually) get the money back (as a credit) when you file your tax return. The distributions from other investments get taxed when you file your tax return and that tax isn't taken into account by FM. If you really wanted to get detailed, what you could properly charge against the specific investment would be the time value of the withholdings from the date withheld until you paid your taxes.

[Mark]

Hi Elliot,

I agree this can be misleading when you don't own the shares for the full period. I believe adding a new yield interpolation option:

"Only Report ROI Yields When Item is Owned for Entire Yield Term"

should help address this issue.

You have a valid point on the foreign tax. I believe some people prefer it to reduce their performance, and it is also nice to have it categorized into its own distribution type. If you'd like it to not reduce your performance, record these as a redemption out of the default cash account. It would probably make sense to provide this as an option, so the user could choose the default behavior for these transactions. This way, some could keep it as it is today, or you could have them automatically be recorded as cash redemptions.

[elliots]

Mark,

Your "Only Report .. Entire Yield Term" would be a great solution. I also would love to see the option on the Foreign Tax.

Keep up the good work!

Elliot

[Ivan]

Mark,

If I can, let me add my name to the request list for the "Only Report ROI Yields When Item is Owned for Entire Yield Term" option. I hope I am understanding it correctly though. I would phrase it as "Calculate ROI for the term that the investment was held". I have been struggling with this issue for a while. The %Gain-I column is close to what I am looking for, but an ROI not "annualized" to the limits set by the report would be perfect.

Thanks,
Ivan

[Mark]

Hi Ivan,

Thanks for the feedback. I think you are looking for something slightly different. The option "Only Report ROI Yields When Item is Owned for Entire Yield Term" does not adjust the yield term. It controls whether or not a yield is reported for the yield term being calculated. For example, if you request a 3 month yield, and only owned it for 1 month of that time period, you will get N/A when that option is on.

I believe what you're asking for is to have the yield term adjusted to only the 1 month period where you did own it, and then report that yield. I think a new report field named something like "ROI Earned (between)" might be appropriate here. This field would determine the date range you owned the shares within the report date range, and calculate the yield for this term. In the above example, it would calculate the ROI yield over that 1 month that you did own it. As Elliot previously mentioned, it would probably be necessary to flag this yield somehow, so you know it wasn't calculated for the full report date range, but for some lesser time period. We could maybe put an asterisk beside it, or maybe create a different field that would show the actual dates owned, or a percentage of the time period it was owned. We'll have to give the specifics here some thought, but that is the idea.

[Ivan]

Hi Mark,

You're right. "ROI Earned (between)" as you describe it is what I am looking for, and I suspect others might find it useful too. I'm not sure about the name though, because all the other "betweens" seem refer to the report range, not the date range the investment was held. But that's just a detail.

Thanks,
Ivan

[elliots]

Mark,

On the Foreign Tax Paid issue, giving the option would be a great improvement. An even better option would be to allow the FTP transaction to stay, just don't use it to reduce the return of the investment and don't have it "balance" against the cash out transaction so the cash out would be external (a Withdrawal), and the FTP could still be listed on a Distribution Summary report.

Elliot

[Mark]

Hi Elliot,

Okay, thanks for the feedback.

[Mark]

Hi Elliot and Ivan,

The new FM 11 beta is available and adds this new yield interpolation option:

"Only Report ROI Yields When Item is Owned for Entire Yield Term"

There are also new related Custom report fields:

Date owned, start (between)
Date owned, end (between)
ROI yield (owned between)

If you're interested to try out the new beta, see:

http://www.fundmanagersoftware.com/fm11beta.html

[elliots]

Mark,

Checked this out and it appears to work well. Many thanks.

Very impressive list of new features. You'll keep me busy this weekend trying them out.

Elliot

[Mark]

Hi Elliot,

Thanks for your help testing out the new beta, appreciate it.