Generic Transaction load handling of reinvested dividends.

[modelerMike]

Good day FM folks.

It looks like when a file is loaded and the 'update corresponding default cash transactions' toggle is selected
FM correctly adds default cash 'BUY' transactions for dividends recieved but it also logs a default cash 'BUY' for dividends that are reinvested, this results in douible counting of the dividend recieved in that it adds to the security position AND to default cash. Is there a way to tell FM to ignore default cash BUY transactions when they are reinvested and yet book the corresponding BUY default cash transaction when dividends are not reinvested ?

Guidance appreciated.

Regards,

Mike

[Mark]

Hi Mike,

You should not get a buy of default cash for a reinvested distribution. Only transactions that generate/use cash would have a corresponding entry in the default cash account. Is this some issue you can reproduce?

[modelerMike]

Thanks for the reply Mark.
i just created a generic transaction load test file
and i have the resulting CASH & security .dat files
as well as the resulting transactions report.

What would be the best way to forward these to you.
If there is anything else that would help please let me know.

Regards,

Mike

Update;
PS : i attached the .txt load file and the resulting portfolio transactions report.

[modelerMike]

and here is the resulting transactions report

see attached

[Mark]

Hi Mike,

Your transaction file contains 2 distributions, one that is distributed, and one that is reinvested. Your cash account ends up correctly showing 1 deposit, which corresponds to the distributed dividend.

I think you may be thinking that a reinvested distribution needs both a DIST_D and a REINV_D, but this is not true. For a reinvested distribution, you only need a REINV_D. This REINV_D will show both the dividend and the corresponding re-purchase of shares.

[modelerMike]

Thanks Mark ,

At one point I thought dividend distributions had to be entered explicily in order
to have performance reports reflect dividend income as part of each security's performance.
So what you are saying is that the reinvestment takes care of both; the added security position AND the dividend performance for the position.

How can i run a performance report to highlight the error of my ways.
That is how could one of the performance reports have highlighted my load file error more clearly?

What reports can i run to show the income return component for this security was double counted for the incorrect load i did ?

Guidance appreciated.

[Mark]

Hi Mike,

Correct, the REINV_D records a dividend and a purchase with those proceeds. You can see this in a variety of places. The easiest is just to look in the Data Register under the "Distributions (all)" data type. If you do that for your example file, you should see 2 dividends (one reinvested and one distributed). You can also create a "Distribution Summary" report which would show double the amount you are expecting, since you have it recorded twice. The Portfolio Performance report has a column "With-Dist." which shows the amount of distributions withdrawn. This does not include reinvested distributions, since those are already factored into the End Value. From within the Portfolio Performance report you can choose "Help / Help on Report..." for much more explanation on each of these fields.

Another way of explaining this is that a REINV_D is equivalent to recording a DIST_D and a BUY.

[modelerMike]

Thanks Mark,

I clearly need to spend more time getting up to speed with your product.

Time to dive back into the documentation provided.

Enjoy the weekend.