Total of "Value Change-LD"

[Djobydjoba]

Mark, could you explain how is calculated the total of "Value Change-LD" at the bottom of the Portfolio Editor? I have some unexplained results.

Thanks.

[Mark]

Hi Djobydjoba,

The market value is calculated for the portfolio as of the default ending date, which is the date of the most recent price on/before the current date. The market value is also calculated for the day prior to this default ending date. The change in market value between these 2 dates is the Value Change-LD.

If you want to confirm the default ending date, create a Custom report for "Month to date" for the sub-portfolio in question. The ending date set is the default ending date of that sub-portfolio. Any of the "... to date" choices will have this default ending date.

[Djobydjoba]

Got it. I've added up the Value-Change-LD of each investment with a last price = today in order to check the Value-Change-LD total, but for whatever reason both don't always match. But Today portfolio value - Yesterday portfolio value gives indeed the Value-Change-LD total.

[Mark]

There can be a difference between adding up all the LD numbers for an investment, versus the portfolio calculation, as the LD dates for an investment could be different than the portfolio. The date is determined first, and then all market valuations are done for that date at the portfolio level.

Example: A portfolio contains 2 investments, one with a last recorded price of 7/15, and the other with a last recorded price of 7/16. One of the investments has a default ending date of 7/15, while the other is 7/16. The portfolio's default ending date is 7/16, so it calculates the portfolio market value as of 7/16 (not 7/15, even though that investment's default end date is 7/15).

[Djobydjoba]

Yes, but here's what looks strange to me:

20240717-mer.19h34-01.png (7.83 KiB) Viewed 4502 times

I would expect the Value-Change-LD for the portfolio to be -39,65 (i.e. 1,38-41,03), not -58,63

But Today portfolio value - Yesterday portfolio value (from a Value report) gives indeed -58,63

Edit: due to the exchange rate... The third and fifth investments are in USD. Their last price is 16/7, but today their value are different than yesterday because of the exchange rate. And we can see the price variation in the Price Trend field for today because of the Exchange rate.

[Mark]

Notice, several of the investments have different "Last Price" dates, so each investment level "LD" is done for that investment's LD date. The portfolio calculation is being done from the latest default date of all investments in the portfolio, so you can't just add all the investment LD values to get the portfolio's LD value, as they are for different dates.

For example, the investment with an end date of 08/07/24 is the change in value for that investment from 7/7 - 8/7, but when that investment's value change is being calculated as part of the portfolio it is being calculated for 16/7 - 17/7, which is likely a different change.

[Djobydjoba]

Yes, I agree. Maybe my last post was not clear enough.

I would expect the Value-Change-LD for the portfolio to be -39,65 (i.e. 1,38-41,03), not -58,63

If you notice, I've added only the first two investment LD values, investments with a last price of 17/7, which is correct with what you say and so should match the portfolio's LD value.
But still, there is a difference because of the exchange rate of two other investments that have a last price of 16/7. The value of those have still changed the 17/7 only because of the exchange rate effect.

So the problem, if there is any, is that the value change of an investment due to only a change of the exchange rate (so not accompanied by a new last price) is not shown by the Value-Change-LD. It can be misleading: there is a value change (even if due only to an exchange rate change), but not shown by the Value-Change-LD at the investment level.

[Mark]

Ahh, okay, now I understand your point. Makes sense...