What is the best way to investigate performance errors?

[flight]

Hi Mark,

Can you offer some tips in reconciling errors in the performance report.

For instance, when I run the Portfolio Value report at 6/30/16 and 7/31/16, the value went up 7%. However, when I run the monthly TWR report, it shows +12.50. As much as I would like to be up 12.5%, I know I am up 7%. I also checked again my brokerage statements, it is +7%. And, there were no cash deposits/withdrawals during the period.

thanks

[Mark]

Hi flight,

- Is the monthly TWR ending 7/31/16?
- Are you sure you have no external transactions in this period? Use an "Investment Transaction" report with the filter to only show portfolio external contributions/withdrawals.
- Try turning on TWR yield logging, and look at the equation, to see if your starting/ending values are as expected, and make sure you have no intermediate transactions. See "Options / General Preferences... / Yields" to turn on logging. Press "Help..." in this dialog for instructions.

[flight]

This was helpful as the external transactions showed some unusual items.

What's the best way to record the separation at Hertz? Every 1000 shares of HTZ converted to 200 shares of HTZ (essentially 1:5 split) plus 66 new shares of HERC. I booked the HERC shares as a transfer in.
Thanks

[Mark]

Hi flight,

This sounds like both a "Spin-Off" and then a "Split". Use the "Investment Data / Spin-Off..." wizard to first create the 66 new shares of HERC. This will transfer some cost basis/market value to the new HERC shares. Next, record a 1 for 5 split in HTZ.

[flight]

Thanks Mark,

On a separate but related topic, have you ever looked at the difference between how FM and Charles Schwab calculate TWR?

The FM and Schwab TWR calculations match exactly except for the month in which a contribution/external cash flow occurs. The difference appears to be the effective date of the cash flow.

For instance, in this account, I have a $2,000 external deposit on January 7th, 2016. When I put this exactly in FM on Jan 7th, there is a difference of about 40 basis points in TWR for the entire month.

However, when I change the deposit date as January 6th, 2016 in FM, the TWRs in both FM and Schwab match exactly.

Is there some sort of effective date/timing difference?

[Mark]

Hi flight,

I don't know any specifics of how Schwab does this calculation, but from what you're describing it sounds like they may apply the external cash flow on the beginning of the day, where FM is applying it at the end of the day. You can see the documentation on our calculation, and an example here:

https://www.fundmanagersoftware.com/hel ... s_twr.html

[flight]

Is the yielding logging file TWR_log.txt usually large? it is showing at 820 MBs.

[flight]

I closed and re-opened the program and it is a more reasonable size. But trying to investigate this...

Cash Flow Period: 9/24/2016 - 9/30/2016 BMVi: 133.230000 EMVi: 133.250000 Yieldi: 0.02 Yield: 90.51
Annualizing... Calculation Span (years): 0.082192 Adjusted to Term (years): 0.082192 Annualizing Result: 90.51 -> 90.51
Result: Success
Yield Result = 90.51

[Mark]

Hi flight,

I wouldn't leave on the logging option permanently, that log file will just continue to grow. You can safely delete it if you don't need the data. Turn logging on/off under "Options / General Preferences... / Yields".

It looks like you have on the option to annualize yield for terms less than 1 year. By default, this is off, and the normal way of reporting returns. That sample is saying that you made 0.02% in 6 days, so extrapolating that to a full year, becomes 90.51%. You can set your preference on whether or not to annualize yields less than 1 year in that same dialog (Options / General Preferences... / Yields).

[flight]

Thanks Mark, I have turned off the yield logging.

I checked the general preferences and I don't have the annual option checked off.

I was transferring one account to a different account and the last month of the old account is showing the 90%.

[Mark]

Hi flight,

I think I read that log wrong... It only showed 1 cash flow period where it had 0.02 in that period, but the total was 90%. Look at the other cash flow periods for that calculation. You would have to turn logging back on while you debug this. If you need help, paste the whole section of the log for that one calculation.