Inception Return

[astraseske]

How can I get a factual Inception Return from the Executive Summary since I started managing the account?

Thanks,

Adam

[Mark]

Hi Adam,

You would need to have all the transactions recorded since you started managing the account. Do you have this, or are you running into some other problem?

[astraseske]

I have all the transactions recorded since starting to manage the account. However, when I go to the Open Lots report, it shows zero as an Open Value. The only way I seem to get an open value is if I create a cost basis which may be near impossible with mutual funds purchased over the years.

Thank you.

[Mark]

Hi Adam,

Did you import positions to get started? It sounds like your initial purchase of shares was done at a cost of $0? This is fairly common if you import positions, and there is no cost basis data in the position source. If you have an initial purchase at a price of $0, you wouldn't want to do any reporting back to this date, as that is not the actual price. You could modify these initial purchases to be purchased at the market value on the date you took over. For example, if you took over on 1/1/2012, record the purchase price to be the closing market price on 12/31/2011. With this method you can show performance since you took over. You could not however report on tax gain/loss of these shares, as that is not their cost basis. If you know the cost basis of the initial shares, you can record the initial shares as a transfer in, where you can set the market value on the date of the transfer, and you can also specify the cost basis date/value separately. If you record them this way, you can then report both performance since you took over, and also tax gain/loss.

[astraseske]

Hi Mark,

I understand and have gone back and found all the relevant information I can about the investments that were transferred.

I'm not so much worried about the cost basis for taxes because I'm leaving it to the custodian. However, the information about the value at transfer is important.

The problem I'm having is when I run the executive summary, the % Gain seems to be reporting as if the cost was zero. So I then go to the 'Data Register' from 'Portfolio Editor,' select the mutual fund in question, then plug in the 'Market Value' at the date the fund was transferred. I click 'OK,' then re-run the Executive Summary and it remains the same.

I then did all the same as above only add the transferred in value to the 'OOP Cost Value' while leaving the number in the 'Market Value' field. I run the report and it seems to work. I then take out the 'Market Value' and the report seems to run again correctly.

So to get a factual performance number I have the following questions:
Does it matter how I get to the Data Register (for example, from an open lots report, portfolio performance, etc.)?
Is it best to plug in the value of the investment transferred in both the 'Market Value' and 'OOP Cost Value?' Or could I just plug the number into the 'OOP Cost Value' field?

After reading the definition of the OOP Cost Value, it just seems the way I'm describing above is not the right way, so I wanted to verify.

Thanks, Mark.

Adam

[Mark]

Hi Adam,

For this situation you should put the market value on the date the shares transferred in into both the Market Value and OOP Cost fields. This is your starting point, since you took over.

It does not matter how you get to the Data Register.