portfolio performance incorrect results

[schwarcz]

I'm int he process of evaluating the software, so I apologize in advance if this is user error.

In any case in my trial data sets, I see a weird and incorrect data in the performance report for one investment.

The investment in question is 20,000 shares.
The share price is always 1.000.
Bought on 12/30/08 and sold on 9/8/09.

The portfolio value report shows its value on 12/31/08 to be $20,000 which is correct.

However, the portfolio performance report for 12/31/08 - 11/29/09 shows a beginning value of $51,822. I have no way of account for the difference between the two reports. Can anybody help me?

[Mark]

Hi schwarcz,

Try taking a look at this investment in the Data Register. Check under the data type of "Investments(all)" and see if you don't have some other transactions besides a buy of 20,000 shares and a sell of 20,000 shares.

The Portfolio Value report on 12/31/08 shows the value at the "end" of 12/31/08. The Portfolio Performance report beginning on 12/31/08 shows the value at the "beginning" of 12/31/08, which is the same as the close of 12/30/08. If you change your Portfolio Value report to 12/30/08, it should also show $51,822. To figure out why, look at your recorded transactions in either the Data Register or an Investment Transactions report.

[schwarcz]

Hi Mark,

Thanks for the quick reply.

The data register for Investments(all) just shows two entries the 12/30/08 transfer in and the 9/8/09 sale. The share price and the quantity are the same and are correct.

The portfolio value for 12/30/08 shows the correct value of $20,000.
The portfolio value report for 12/31/08 also shows the correct value of $20,000

The investment transaction report for 1/1/2008 - 12/30/2009 shows a 12/30/08 TXIn and a 9/8/09 Sell. There are also to Int Inc transactions on 3/8/09 and 9/8/09.

Am I missing something? Are there other pieces of data I can look at? The transactions look correct to me and the prices look right too.

Thanks

[Mark]

Hi schwarcz,

So the Portfolio Value on 12/30/08 shows 20,000, but the beginning value of the Portfolio Performance report starting on 12/31/08 shows $51,822? If you turn off "Options / Report Preferences... / Portfolio Performance / Use Accrued Interest", does that change anything?

Could you email me this investment file? I'll recreate the reports, and see if I can answer you more specifically on what is going on. I'll send you an email now that you can reply to with the investment file.

[schwarcz]

Hi Mark,

Turning off accrued interest solved the problem. However, I don't understand how the accrued interest could increase the value by 153% when the coupon rate is 5.05% and the holding period was so short.

I've just sent you the .dat file.

[Mark]

Hi schwarcz,

Thanks for the file. The problem is that for bonds, Fund Manager expects the shares to be recorded as 1/100th the Face Value, and the price to be around 100, as in percent of par. So, instead of 20,000 shares at a price of 1, record this as 200 shares at a price of 100. Then, the accrued interest calculation will make more sense. I've corrected this in the example you sent, and I'll email it back to you.

[schwarcz]

Thanks for the speedy help. I will continue to try to work to understand the application.