Re: Yields

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In Reply to: Re: Yields posted by Peter Petula on April 19, 1999 at 10:16:05:

: : : : : : : : Dear Mark,

: : : : : : : : what type of yield should I use in a custom Report to get the yield of an investment fund for which I had to pay the load percentage plus transfer fees ? All yield calculations I have tried so far calculate based on the NAV when buying. So for instance I have bought shares @ 69.85 for a total of 74.45, the current price is 70.25 but the yields shows plus 23.75 % I would like to calculate the yield from buying day until today. Any suggestions ?

: : : : : : : : Best regards

: : : : : : : : Peter

: : : : : : : Hi Peter,
: : : : : : : I didn't quite follow your example, but in
: : : : : : : general you would use ROI yields. FP yields
: : : : : : : only calculate the yield, based on the share
: : : : : : : price/distributions. ROI yields include your
: : : : : : : transactions. ROI yields do use your purchase/sell
: : : : : : : price when incorporating your transactions, as
: : : : : : : that is the price you paid. Another thing to note
: : : : : : : is that all yields are annualized, so if you're
: : : : : : : looking at a short time period, the yields may
: : : : : : : seem bigger/smaller, due to extrapolation to a year.

: : : : : : : Thanks,
: : : : : : : Mark
: : : : : : : --
: : : : : : : Mark Beiley
: : : : : : :
: : : : : : : Fund Manager for Windows 3.1x/95/98/NT
: : : : : : :
: : : : : : :

: : : : : : Hi Mark,

: : : : : : my intent ist to take the total aquisition cost (i.e shareprice + load + fees) as a basis for yield annualized calculation. As lond as this gross price plus distributions is higher than the latest share price I would expect to get a negative yield. But this ist not the case in all combinations I have tried so far. The reason why I want to calculate the yield this way is that I like to take all cost into consideration which are associated with a particular investment at purchase time.

: : : : : : Best regards,

: : : : : : Peter

: : : : : Sorry, I just noticed an error in my previous message. The second sentence should read: As long as this gross price is higher than the latest share price (including distributions, if any)I would expect to get a negative yield. If required for examination, I could send you a copy of the .dat file of the investment.

: : : : : Peter

: : : : Hi Peter,
: : : : The ROI yields do just this, they include
: : : : all of your costs, including commissions.
: : : : The formula also includes distributions.
: : : : Please see the formula used in the online help.
: : : : I think ROI is just what you are looking for.

: : : : Thanks,
: : : : Mark
: : : : --
: : : : Mark Beiley
: : : :
: : : : Fund Manager for Windows 3.1x/95/98/NT
: : : :
: : : :

: : : Hi Mark,

: : : many thanks for your patient help but the problem persist. Before I decided to ask you I knew from the descriptions in the help files that it had to be ROI I was looking for. But only when I didn´t get the expected figures I was trying any other available field of the custum report.
: : : My data are: price inception 3/10/99; purchase 3/15/99 at 74.45 euro; price an 3/16/99 70.09 euro;
: : : Given this, one would expect to get a negative return on investment but the report (1/1/98 through 4/8/99) shows a positive ROI(end) of 19.25 percent. What could be the reason? Do you need further data for analysis?

: : : Thanks, Peter

: : Hi Peter,
: : Can you e-mail me a copy of this investment
: : file (*.dat). Please copy the report dates
: : and fields in your e-mail, and I'll take a look.

: : Thanks,
: : Mark
: : --
: : Mark Beiley
: :
: : Fund Manager for Windows 3.1x/95/98/NT
: :
: :

: Hi, Mark

: I sent you the .dat file of the investment by separate email. My report settings are Jan 1, 1998 until the current date and I use the following fields: Inv incpt, OOP invested, Edn NAV, End shares, End value Dist dist (btw) Gain (btw) End %port ROI (1y) and ROI (end).

: Peter

The problem is the ROI(end) definition is probably misleading. It calculates the
ROI yield from the report date back to the date of the first investment. This starts
with the closing value on the date of your first investment, thus it basically skips
any fees paid by your first purchase. I'm planning on changing the way this
works to go back one day prior to your first investment, as this will calculated
the figure that was intended...

As an example, let's say you bought some shares on 3/15/99 for $2100, but at
the end of the day, the value of these shares was only $2000. Then you run
a report on 3/23/99 with the ROI(end) figure included. Let's say the value on
3/23/99 is back up to $2050. Well, from $2000, that has increased $50, so you
will see a positive ROI(end) value. If you turn on the yields above the graphs and
set the date range to 3/14/99 to 3/23/99 you will see a negative ROI yield.

Thanks,
Mark
--
Mark Beiley

Fund Manager for Windows 3.1x/95/98/NT

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