Procedures for handling Switch OOP values

[Gally]

I have a number of fixed folders in which I handle the initial purchase and subsequent swtich of funds.
The first question should these switches be recorded as sell/buy transactions or transfer out/in.

I have decided to do the latter as this reflects what the fund manager reports but can you please offer advice as to the 'correct' method for completing the OOP transfers values for switches between investments in a portfolio.

For example, If I invest 1000 in fund A and then transfer out of this fund into fund B I set the OOP of fund B to the original 1000 and not the MKt value on transfer.

However this does not show the relative performance of fund B as it carries forward the OOP values from fund A.

A normal sequence might be a purchase, follwed by a transfer out and a transfer In. If I do not use a transfer between what should teh transfer in OOP value be?

I always carry forward as the OOP of the original investment so that on each switch the successive fund holds the original OOP value of the previous fund investment.

Can you please advise a 'correct' procedure for handling OOP values on transfer. I currently do this manually by a transfer out and a transfer in as per my fund management statement but need to post a 'correct' OOP, what should this be.

I have tried your automatic postings but they generate multiple transfer in transactions that make it difficult for me to to reconcile tehm to my fund management statement. To get just 1 transfer out and one transfer for a switch which transfer method should I use.

many thanks

John G

[Mark]

Hi John G.,

To answer your first question about whether to use buy/sell or transfers: This depends on if there was a capital gains event or not. If your sell generated a taxable event, I would use buy/sell. If it is an internal fund transfer that didn't generate a taxable event, then use transfers.

The OOP to transfer can be done a couple of ways. You can either transfer it as the original OOP or you can transfer it as the market value as of the date of the transfer. If you choose the original OOP you are moving any prior gains/losses in OOP to the new investment. If you prefer to only look at the new investment from the date of transfer, then you should use the market value. So, there is no one "right" answer, it depends on what you'd like to track.