Question on Morningstar Portfolio Tracking Tool - Unrealized Gain/Loss

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MorningstarFan
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Question on Morningstar Portfolio Tracking Tool - Unrealized Gain/Loss

Post by MorningstarFan » Wed Dec 28, 2016 6:50 pm

Hi all,

I have a question regarding to Unrealized Gain/Loss Since Purchase calculation after a fund reinvests distribution using the Morningstar Portfolio tool (the auto update feature). I've noticed sharp drops of % unrealized gain because the tool counts the reinvested distribution as original investment.

I understand that dividend or cap gain distributions do not affect the overall gain (expect NAV drops slightly). However, the Morningstar tool recognizes as loss.

Here is the detail:
I originally invested in Harbor Capital Appreciation Fund (HCAIX) with $3,000. I received $180.97 of distribution and all is reinvested. As of today, the market value is $3,081.37. Technically I gained $81.37 and the % unrealized gain should be positive. However, the Morningstar tool counts as -3% because it included the distribution as "additional investment".

Is there another tool that tracks the Unrealized Gain/Loss better? Or do you guys find a different way to track the funds?

livesoft
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Re: Question on Morningstar Portfolio Tracking Tool - Unrealized Gain/Loss

Post by livesoft » Wed Dec 28, 2016 6:52 pm

By paying you the distribution, the gain is realized, so there is no way it can be called "Unrealized" anymore.
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MorningstarFan
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Re: Question on Morningstar Portfolio Tracking Tool - Unrealized Gain/Loss

Post by MorningstarFan » Wed Dec 28, 2016 6:56 pm

livesoft wrote:By paying you the distribution, the gain is realized, so there is no way it can be called "Unrealized" anymore.
Good point, that is right. I guess I should rephrase my question - is there a way to track my investment live just by comparing the market value of the fund vs my original investment?

Per the example, I only invested $3,000 and the market value is $3,081.37. Is there a tool that track that regardless of distribution daily? (So that I don't have to calculate each day)?

livesoft
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Re: Question on Morningstar Portfolio Tracking Tool - Unrealized Gain/Loss

Post by livesoft » Wed Dec 28, 2016 6:58 pm

I use the free-download version of MS Money on an old laptop to do performance/return reports. But that version requires manual entering of transactions, etc. But there is a benefit to manual entry: You don't obsess over daily performance. :)
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MorningstarFan
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Re: Question on Morningstar Portfolio Tracking Tool - Unrealized Gain/Loss

Post by MorningstarFan » Wed Dec 28, 2016 7:02 pm

livesoft wrote:I use the free-download version of MS Money on an old laptop to do performance/return reports. But that version requires manual entering of transactions, etc. But there is a benefit to manual entry: You don't obsess over daily performance. :)
Aha, I see. I have to agree that looking at daily performance may distract you away from long-term investment plans! Thanks for the help today. :)

MIretired
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Re: Question on Morningstar Portfolio Tracking Tool - Unrealized Gain/Loss

Post by MIretired » Wed Dec 28, 2016 9:56 pm

Morningstar "Portfolio Manager" gives correct %unrealized gain and $unrealized gain. --with dividends reinvested. Or not (showing realized gain, then.)

AlohaJoe
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Re: Question on Morningstar Portfolio Tracking Tool - Unrealized Gain/Loss

Post by AlohaJoe » Wed Dec 28, 2016 11:26 pm

MorningstarFan wrote:Per the example, I only invested $3,000 and the market value is $3,081.37. Is there a tool that track that regardless of distribution daily? (So that I don't have to calculate each day)?
I don't really understand what you're trying to get here. You didn't "only" invest $3,000. You invested $3,000 to start with and then you invested another $180.97. You've invested $3,180.97.

Maybe what you're trying to get at is: money invested at different points in time will have different returns. $100 invested in 2015 might have an annual return of 12% but $100 invested in 2016 might have an annual return of only 6%.

Trying to separate that out is possible: you're really trying to look at different tax lots and their returns. I don't use Morningstar so I don't know if it has a view like that. I know that Vanguard does. Though generally tax lot returns are shown in dollar figures (e.g. $1,234) rather than percentages, since people mostly care about tax lots for, well, tax reasons. But you could convert to an annualised percentage return easily enough.

MorningstarFan
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Re: Question on Morningstar Portfolio Tracking Tool - Unrealized Gain/Loss

Post by MorningstarFan » Thu Dec 29, 2016 12:48 am

Let me re-state my point:

The reason I didn't consider $180 as new investment is because I didn't put $180 from my own pocket, rather, it is generated by investing in the fund. I am looking for a tool that only tracks how much money I invest out of pocket versus market value of the funds.

I think you get my point right - I do not really care about tracking capital gains and reinvested. That complicates my % of earning.

MIretired
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Re: Question on Morningstar Portfolio Tracking Tool - Unrealized Gain/Loss

Post by MIretired » Thu Dec 29, 2016 2:52 am

If you are using M* portfolio manager, turn off auto updates if you can; then click 'modify' and click 'dividends/splits' ; will show non-done updates to save by checking 'allows'.
Mine works. Just started a new fund with 1 buy and 1 dividend. Unrealized gains are correct.
Yours should show a gain, not loss, too.

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Re: Question on Morningstar Portfolio Tracking Tool - Unrealized Gain/Loss

Post by MorningstarFan » Thu Dec 29, 2016 5:15 am

AlohaJoe wrote: I don't really understand what you're trying to get here. You didn't "only" invest $3,000. You invested $3,000 to start with and then you invested another $180.97. You've invested $3,180.97.

Maybe what you're trying to get at is: money invested at different points in time will have different returns. $100 invested in 2015 might have an annual return of 12% but $100 invested in 2016 might have an annual return of only 6%.
To all:
I think I finally figured out what I am looking for. I just realized the difference between Unrealized Gain and Investment Gain. I am more interested in tracking Investment Gain, or the total gain. Here is the link which cleared my confusion! :oops:

http://www.dinuzzo.com/unrealized-capit ... istinction

Does anyone know any tools that will track Investment Gain instead?

MorningstarFan
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Re: Question on Morningstar Portfolio Tracking Tool - Unrealized Gain/Loss

Post by MorningstarFan » Sat Jan 14, 2017 9:02 pm

Hi all, I find the solution for myself!

It turns out that the Morningstar's Portfolio Manager has an option of how to calculate cost basis. Now, all reinvested capital gains and dividends show up as total positive returns! :D

If you click on the gear icon on the top left corner, then select the "Portfolio" tab. Then you select "Adjusted Method" in "Cost Basis" menu. The morningstar's explanation to both options are:

Adjusted Method: This option allows you to exclude reinvested dividends and/or capital gains distributions from the costs basis calculation. It uses the price paid for your shares plus any commissions/fees incurred while purchasing shares to calculate your cost basis.

Default Method: This option, which is consistent with IRS guidelines, includes the price paid for your shares, plus reinvested dividends and/or capital gains distributions. It also includes any commissions/fees that you may have incurred when you purchased shares.

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sperry8
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Re: Question on Morningstar Portfolio Tracking Tool - Unrealized Gain/Loss

Post by sperry8 » Sat Jan 21, 2017 7:07 pm

MorningstarFan wrote:Hi all, I find the solution for myself!

It turns out that the Morningstar's Portfolio Manager has an option of how to calculate cost basis. Now, all reinvested capital gains and dividends show up as total positive returns! :D

If you click on the gear icon on the top left corner, then select the "Portfolio" tab. Then you select "Adjusted Method" in "Cost Basis" menu. The morningstar's explanation to both options are:

Adjusted Method: This option allows you to exclude reinvested dividends and/or capital gains distributions from the costs basis calculation. It uses the price paid for your shares plus any commissions/fees incurred while purchasing shares to calculate your cost basis.

Default Method: This option, which is consistent with IRS guidelines, includes the price paid for your shares, plus reinvested dividends and/or capital gains distributions. It also includes any commissions/fees that you may have incurred when you purchased shares.
This is very interesting. I didn't know this existed, thanks!

I do still wonder why M*'s returns don't sync up properly with my returns. That is, I don't invest on Jan 1. Even though I can enter shares added during the year, the 1 year, 3 year, YTD views - don't change re returns. They stay the same (as though I bought all the shares listed exactly on the start date). Anyone know a fix? :confused
Humbling BH contest results: 2017: #516 of 647 | 2016: #121 of 610 | 2015: #18 of 552 | 2014: #225 of 503 | 2013: #383 of 433 | 2012: #366 of 410 | 2011: #113 of 369 | 2010: #53 of 282

MIretired
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Re: Question on Morningstar Portfolio Tracking Tool - Unrealized Gain/Loss

Post by MIretired » Mon Jan 23, 2017 3:11 pm

sperry8 wrote:
MorningstarFan wrote:Hi all, I find the solution for myself!

It turns out that the Morningstar's Portfolio Manager has an option of how to calculate cost basis. Now, all reinvested capital gains and dividends show up as total positive returns! :D

If you click on the gear icon on the top left corner, then select the "Portfolio" tab. Then you select "Adjusted Method" in "Cost Basis" menu. The morningstar's explanation to both options are:

Adjusted Method: This option allows you to exclude reinvested dividends and/or capital gains distributions from the costs basis calculation. It uses the price paid for your shares plus any commissions/fees incurred while purchasing shares to calculate your cost basis.

Default Method: This option, which is consistent with IRS guidelines, includes the price paid for your shares, plus reinvested dividends and/or capital gains distributions. It also includes any commissions/fees that you may have incurred when you purchased shares.
This is very interesting. I didn't know this existed, thanks!

I do still wonder why M*'s returns don't sync up properly with my returns. That is, I don't invest on Jan 1. Even though I can enter shares added during the year, the 1 year, 3 year, YTD views - don't change re returns. They stay the same (as though I bought all the shares listed exactly on the start date). Anyone know a fix? :confused
I didn't know about the different cost basis either.
For me, I only look at realized and unrealized gains. And , also, avg. cost/sh. These tell me how I'm ahead or behind.
But it's really a not all inclusive tracking tool to me.
The returns (1 wk, mo, yr, 3yr, 10yr...)are fund returns, not your port. returns. So, unless you didn't make any transactions other than dividends --(not sure if the different cost basis above affects fund total returns) for the certain period...

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sperry8
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Re: Question on Morningstar Portfolio Tracking Tool - Unrealized Gain/Loss

Post by sperry8 » Mon Jan 23, 2017 5:13 pm

MIpreRetirey wrote:
sperry8 wrote:
MorningstarFan wrote:Hi all, I find the solution for myself!

It turns out that the Morningstar's Portfolio Manager has an option of how to calculate cost basis. Now, all reinvested capital gains and dividends show up as total positive returns! :D

If you click on the gear icon on the top left corner, then select the "Portfolio" tab. Then you select "Adjusted Method" in "Cost Basis" menu. The morningstar's explanation to both options are:

Adjusted Method: This option allows you to exclude reinvested dividends and/or capital gains distributions from the costs basis calculation. It uses the price paid for your shares plus any commissions/fees incurred while purchasing shares to calculate your cost basis.

Default Method: This option, which is consistent with IRS guidelines, includes the price paid for your shares, plus reinvested dividends and/or capital gains distributions. It also includes any commissions/fees that you may have incurred when you purchased shares.
This is very interesting. I didn't know this existed, thanks!

I do still wonder why M*'s returns don't sync up properly with my returns. That is, I don't invest on Jan 1. Even though I can enter shares added during the year, the 1 year, 3 year, YTD views - don't change re returns. They stay the same (as though I bought all the shares listed exactly on the start date). Anyone know a fix? :confused
I didn't know about the different cost basis either.
For me, I only look at realized and unrealized gains. And , also, avg. cost/sh. These tell me how I'm ahead or behind.
But it's really a not all inclusive tracking tool to me.
The returns (1 wk, mo, yr, 3yr, 10yr...)are fund returns, not your port. returns. So, unless you didn't make any transactions other than dividends --(not sure if the different cost basis above affects fund total returns) for the certain period...
I didn't realize a portfolio tracker would show me (1 wk, mo, yr, 3yr, 10yr...) fund returns as opposed to portfolio returns. There are other columns that show my actual unrealized/realized cap gains... so I (incorrectly) assumed they were portfolio returns. Especially since there are totals at the bottom that show (1 wk, mo, yr, 3yr, 10yr...) returns for all the funds inputted. Why track my portfolio with them if they are not going to show me personal portfolio returns?!
Humbling BH contest results: 2017: #516 of 647 | 2016: #121 of 610 | 2015: #18 of 552 | 2014: #225 of 503 | 2013: #383 of 433 | 2012: #366 of 410 | 2011: #113 of 369 | 2010: #53 of 282

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