Conversion of share class

[paulk]

I have a good number of investments in one share class of a company's funds. These funds are being automatically converted to a new share class. What is the proper way to treat this conversion in fund manager in order to not effect performance, not realize a taxable event (the conversion is nontaxable) and properly carry over holding period and cost basis?

[Mark]

Hi paulk,

There are a couple of ways you can record this:

1) Record a split with a ratio of <new shares> for <old shares>, and then change the name/symbol/CUSIP to the new fund information. You might also record a "Note" for that date, or just put it in the memo of the split transaction. If the new shares are equal to the old shares, then you do not record the split transaction, and just do the name/symbol/CUSIP change.

2) Use the "Transfer Between" wizard to move the shares from the existing investment to a new investment.

Personally, I prefer #1, as it keeps the full history in a single investment, and is simpler. One thing to keep in mind with #1 is if the shares change, the share price is usually also different, so you wouldn't want to retrieve historical prices back prior to this split date using the new symbol.