"redemption" or "transfere out" when mov

[bagmore]

1. If moving cash from one sub-portfolio to another, should you record the transaction as a "transfer out" or as a "redemption"?

2. If moving cash out of a sub-portfolio to spend or to an account not monitored by FM, should you record the transaction as a "transfer out" or as a "redemption"?

[Mark]

Hi bagmore,

The differences between transfers and purchases/redemptions are transfer outs do not generate capital gain events, and transfer ins allow you to have a separate cost basis from the value of the moved shares. In the case of cash you do not normally pay capital gains on cash sells and in neither of these cases would you need a different cost basis from the value moved, so it doesn't really matter whether you use a redemption or a transfer. To keep things basic, I'd suggest using redemptions in both cases. There are no differences in performance between transfers and purchases/redemptions.