Margin and other expenses

[mchu168]

Hi Mark,

I use Interactive Brokers and am charged for margin interest expense and other monthly expenses (market data subscriptions, etc) by the broker. These expenses come through the OFX imports into FM from IB and show up as redemptions in my cash asset.

How does FM handle these expenses in the various performance calculations in reports? I tend to use TWR. I think these expenses should subtract from performance, but does FM report performance gross or net of these expenses? If FM reports gross performance, is there a way to show net performance in a custom report?

Thanks

[Mark]

Hi mchu168,

Fund Manager's yield calculations take into account all your recorded transactions. If you're getting these expenses recorded just as sell of cash transactions, then this is not penalizing your performance. A sell of cash is pretty much neutral, it just changes how much you have invested. Instead, if you want it to factor into your performance, you should record these as Account Fees. An Account Fee is a type of distribution. Record a distribution, and mark it as "Reinvested". Set the type to "Account Fee", and record the shares/value to the same negative number. The price stays at $1 for cash. You can then delete the cash sell. This has the same effect on your cash shares as the sell, but will reduce performance in the ROI and TWR yields. When looking at investment level returns, your cash performance will suffer, since you are putting all these fees into the cash investment. They will also be factored in accordingly for your portfolio level returns.

[mchu168]

Understood. Thanks for the quick reply!