exchange rate to default and currency templates

[bralim]

Hi,
I am finding very useful to use currency templates for various reasons. I use as base currencies either USD or EUR depending on what I am looking at.
I am now trying to enter a transaction where the currency exchange was embedded in a stock purchase, that is, I provided USD and was given back shares in a different currency. Hence I am desiring to use the "specify exchange rate to default" feature in a buy trade. However, when I change currency template this same rate (wrongly) applies to a different currency base.
Literally the field seems to be behaving as desired since it is the exchange rate to default and I am changing the default currency. However, this "feature" in my view precludes the use of both specify exchange rate to default and currency templates as their results together will never be correct.
Do you agree? is there any workaround? what i can think at is to seprately book currency exchange trades and perform the buys in the currency of the shares hence not having to use the specify exchange rate to default. However, this means that I cannot fully use the historical basis as computed by fund manager but will need to add the currency conversion to it.
Regards,
bralim

[Mark]

Hi bralim,

Good point, I hadn't thought about that scenario. You are right, that if you use a transaction specific exchange rate, it only applies to whatever default currency you enter that specific exchange rate for. You can't enter multiple transaction specific exchange rates for multiple default currencies, so you would either have to pick a single default currency, or not use this feature when using multiple currency templates. If you don't enter a transaction specific exchange rate, the recorded global exchange rate (Options / Currency Settings...) will be used when converting that transaction to the default currency. I don't see a workaround to use both transaction specific exchange rates and multiple currency templates at the same time. We'll have to give this some thought. Maybe when entering the transaction specific exchange rate you could select the default currency also. If your assigned default currency is the same, then it will use your entered transaction specific exchange rate. If the default currency is different, then it would revert to using the global exchange rate for the conversion.

[bralim]

Hi Mark,
otherwise one could select the currency for which to specify the exchange rate rather than assuming it is the default?
Anyhow, as you think at currency templates let me highlight another not too desireable feature. Right know I use $ and € as default currency through two templates. I also have both $ and € in the list of currencies below the default one, of course the $ to $ cross (or € to €) has a fixed exchange rate or one. If I look at the currency dropdown (when for example creating a new investment and fixing the currency of the new investment) I see two times the default currency. The drop down is clearly showing me the the list of currencies from the options currency dialog, including the default currency. Hence if $ is the base currency I see [$, $, €, ...] and if € is the base currency I see [€, $, €, ...]. It turns out that when importing transactions through the generic import and specifying the currency in the import if a new investment is created the currency for the new investment is the first in the list of currencies in thecase of duplicates. In other words, if I am using $ as my base currency and hence the drop down of currencies is [$, $, €, ...] then the new investment is created with a currency of $ that is the first $ in the list, that is the default currency. When I change template the default currency is the €, the first currency in the list is also the € hence the investment immediately becomes a € denominated investment with same numeric values as the $ but in € this time. If I had input a price of 50 $ now it will show with a price of 50 €. I tihnk the reason is that the investment thinks its currency is the first element of the currency array which is not $ anymore but €. This is very dangerous as it produces grossly wrong results of course.
A simple solution in my case was to change the currency of investments to the second $ in the list and then everything works fine. I do not see any way to exclude this default other than to use a default currency at import time that is not the currency of any and all new investments. It would seem to me that no investment should have as currency the default currency (i.e., the first element in the currency array).
regards,
bralim

p.s. I hope I explained clearly enough, I think you can easily replicate the issue, if you can't let me know and I will produce an exmple.

[Mark]

Hi bralim,

Yes, I understand your point. Another solution would be to not use the same currency symbol twice. So, you could use:

$
USD
EUR

for currency template #1, and:

€
USD
EUR

for the other currency template. When doing your generic transaction import use USD/EUR so they get assigned to the desired currency position.

[bralim]

Dear Mark,
Indeed, good point. Thank you.
I would consider in any case revisiting the possibility of using the first (default currency) element of the currency array, it would seem to me that can only bring problems.
Other than these issues, the ability to change currency templates is great, serves many purposes for me.

Oh, another issue i have with multiple currencies is that they seem to be giving me issues with yields. I have setup an exchange rate portfolio at the top most level under master portfolio. The exchange rate portfolio has zero value and houses all the exchange rates i need. The yield thou comes out as NA. This NA means that i do not get the yield for the master portfolio (i like it in the graphs as i can get the gph, ie for term). I tried to put a little quantity for every investment, too small to influence anything but at least i can also see yields for currencies. Now the yield for each currency calculates but the one for the portfolio is still NA for some reason (exchange rate flag is on). I still have to investigate but i did not see anything interesting in the roi log. Obviously one solution is to push everything dow the hierarchy one step and then i can get the yields for a portfolio that houses everything but the exchange rates. However i was wondering if there is something I am doing wrong or i should be doing?

Regards,
Bralim

[Mark]

Hi Bralim,

You shouldn't have to own any shares of your exchange rate investments. It is cleaner if you don't actually. This should not prevent calculation of yields at a higher level sub-portfolio. There is probably some other reason. The easiest way to see why a yield isn't reporting is to look at "Help / Graph Calculation Log..." or "Help / Report Calculation Log...", depending on the type of window you're looking at where a yield isn't reporting. That calculation log will give you an explanation of why a yield couldn't be calculated.

[bralim]

Hi Mark,
I get a bunch of errors like the following:
Unable to calculate ROI yield for sub-portfolio "Exchange Rate" for dates 7/23/2014 - 10/22/2014. (ROI yields not available for objects containing different currencies (HKD and €). Turn on "View / Exchange Rate Adjusted" to see yield with data adjusted to default currency.).
Needless to say that view exchange rate adjusted is already on.
Puzzled.
Regards,
bralim

[Mark]

Hi bralim,

We need to improve that message a bit... Any investments marked as "Investment Type" of "Exchange Rate" are not exchanged when you do a "View / Exchange Rate Adjusted". So, if you're trying to calculate a report on something that contains Exchange Rate investments of different currencies, you will get N/A. This isn't something you would probably normally want to do. You shouldn't own shares in your Exchange Rate investments, they should only be for keeping track of daily exchange rates.

If you _really_ want to allow it to calculate on some object containing multiple investments you can turn on "Options / General Preferences... / Other / Allow Summing Values from Different Currencies". I wouldn't normally recommend turning on this option, but if you have a special reason, you can do it.

[bralim]

Dear Mark,
So I eliminated all the exchange rate purchases and (as I started) I still do not get an ROi computed if I look at the entire portfolio including the exchange rates portfolio.
When I graph the whole portffolio this is the error I get:
Graph Calculation Log
Graph Type: Portfolio Value
Active Sub-Portfolio: Master Portfolio
Unable to calculate ROI yield for sub-portfolio "Master Portfolio" for dates 7/23/2014 - 10/22/2014. (ROI yields not available for objects containing different currencies (IDR and $). Turn on "View / Exchange Rate Adjusted" to see yield with data adjusted to default currency.).
Unable to calculate ROI yield for sub-portfolio "Master Portfolio" for dates 4/23/2014 - 10/22/2014. (ROI yields not available for objects containing different currencies (IDR and $). Turn on "View / Exchange Rate Adjusted" to see yield with data adjusted to default currency.).
Unable to calculate ROI yield for sub-portfolio "Master Portfolio" for dates 10/23/2013 - 10/22/2014. (ROI yields not available for objects containing different currencies (IDR and $). Turn on "View / Exchange Rate Adjusted" to see yield with data adjusted to default currency.).
Unable to calculate ROI yield for sub-portfolio "Master Portfolio" for dates 10/23/2011 - 10/22/2014. (ROI yields not available for objects containing different currencies (IDR and $). Turn on "View / Exchange Rate Adjusted" to see yield with data adjusted to default currency.).
Unable to calculate ROI yield for sub-portfolio "Master Portfolio" for dates 10/23/2009 - 10/22/2014. (ROI yields not available for objects containing different currencies (IDR and $). Turn on "View / Exchange Rate Adjusted" to see yield with data adjusted to default currency.).
Unable to calculate ROI yield for sub-portfolio "Master Portfolio" for dates 10/23/2005 - 10/22/2014. (ROI yields not available for objects containing different currencies (IDR and $). Turn on "View / Exchange Rate Adjusted" to see yield with data adjusted to default currency.).
Unable to calculate ROI yield for sub-portfolio "Master Portfolio" for dates 1/1/2005 - 10/22/2014. (Yield interpolation settings set to not allow interpolation prior to earliest recorded data. Yield term start of 1/1/2005 is before first transaction of 3/9/2005).

when I graph only exchange rates this is what I get:
Graph Calculation Log
Graph Type: Portfolio Value
Active Sub-Portfolio: Exchange Rate
Unable to calculate ROI yield for sub-portfolio "Exchange Rate" for dates 7/23/2014 - 10/22/2014. (No transactions).
Unable to calculate ROI yield for sub-portfolio "Exchange Rate" for dates 4/23/2014 - 10/22/2014. (No transactions).
Unable to calculate ROI yield for sub-portfolio "Exchange Rate" for dates 10/23/2013 - 10/22/2014. (No transactions).
Unable to calculate ROI yield for sub-portfolio "Exchange Rate" for dates 10/23/2011 - 10/22/2014. (No transactions).
Unable to calculate ROI yield for sub-portfolio "Exchange Rate" for dates 10/23/2009 - 10/22/2014. (No transactions).
Unable to calculate ROI yield for sub-portfolio "Exchange Rate" for dates 10/23/2005 - 10/22/2014. (No transactions).
Unable to calculate ROI yield for sub-portfolio "Exchange Rate" for dates 1/1/2005 - 10/22/2014. (No transactions).

Adding transactions to obviate the "no transactions" does not help and is not preferred as you say.
My goal is to be able to compute the yield of the entire portfolio (which includes the exchange rate portfolio). My hack is to add depth to the portfolio tree and leave exchange rate parallel to the whole portfolio. A better approach would be welcome.
Regards,
bralim

[Mark]

Hi bralim,

You need to remove "investments" that have a different currency, not transactions. The normal approach is what you called your "hack", which is to create a hierarchy like this:

Code: Select all

- Master
  - Exchange Rates
  - My Holdings
    - Acct 1
    - Acct N

That way, you can report on "My Holdings", and see your whole portfolio. You don't normally own "Exchange Rates", they are just utility investments for keeping track of exchange rates.

If you want to keep "Exchange Rates" within your "My Holdings" portfolio you can assign all of them to your default currency. Since you're not doing any transactions in here, their assigned currency really doesn't matter. They are assigned to operate as an exchange rate under "Options / Currency Settings...". For example, if you have a EURUSD=X exchange rate investment that you have assigned to be the exchange rate between EUR and your default of $, you can assign this investment to be $. It doesn't have to be EUR, or anything else. This way, when you use "View / Exchange Rate Adjusted", everything, including your exchange rate investments, will be in $, and there will be no complaints from Fund Manager about having multiple currencies in a calculation.

[bralim]

Dear Mark,
Perfect, that helps. Thank you.
Regards,
Bralim