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Morningstar returns and actual returns discrepency
When looking at my returns for PIMIX this year, -3.5%, and what Morningstar lists as the returns in 2018, -9%, I wonder how there can be such a discrepency between our calculation? I mist be missing something...
Jojo, when I look at my brokerage account, it show that I am down 3.5%. I'm looking at that, as well as at M*.
Often times brokerage accounts do not take into account the total return value of your investments (they neglect to factor in things like dividends). From purely a price standpoint PIMIX appears to be down 3.5%, but your total return (including dividends) would be closer to the return referenced by @Ted and probably M* states.
Interestingly, Yahoofinance charts do not factor in distributions...these charts are merely price charts...M* charts are total return charts.
Here's M* YTD Chart (showing the (-.5% drop):
Here's Yahoofinance (showing the 3.5% price drop in share price):
In the Yahoo chart, the "D"s represent fund dividends that were paid monthly. Since Yahoo's chart is a price chart it does not have a way of charting in these "D"s.
I have complained about this with my brokerage asking them to improve this data point, but to no avail. Since I reinvest dividends, I do the math based on my contributions and my account balance. The balance takes into account total return (including dividends).
Even though your share price has dropped 3.5%, your total return is actually closer to a loss of (-.5%).
Thanks for the explanation Bee. Now let's say I sell my shares for a tax loss. Would it be for the 3.5%, since I have been paying taxes on the dividends all along? I also reinvest the dividends.
Similar to the point bee makes (above), with my Schwab brokerage accounts they regard all dividend reinvestments as if those purchases were being made with "new money". When they compute the returns for a particular holding in my account, the returns will therefore be lower than if I had taken the dividends in cash, and of course also lower than M* or any other market report.
I understand their accounting perspective, but it can be rather misleading at times.
Myself, assuming that I've not actually made any additional purchases with "outside money", I look at the gain or loss of any particular holding simply as a total percentage between "time a" and "time b".
@Soupkitchen, I own PONAX. My brokerage features allows me to see the "unrealized gain/losses". See if you have this feature. When I select this feature for PONAX I see: And so, yes these are losses that could be realized by selling shares. The trick is knowing which shares will be sold and therefore what losses will be realized and tax loss harvested. If you hold very old shares they may have unrealized gains.
A call into you brokerage might help explain that for you.
@davidrmoran- Yes, Schwab is terrible in this respect. There is no "initial client invested amount" equivalent. They only give you a "cost basis" which is continually recomputed every time a dividend is reinvested. As far as I know there's no easy way to even find that initial investment.
@Derf- I certainly may be missing something, but the only way that I can see is to drill through the entire history of trades. Unfortunately, that history commingles every transaction for every position held, including each and every purchase, sale, dividend payment and reinvestment since the opening of the account. If the initial transaction was some years back, good luck on groping through the forest. Maybe I'm not looking in the right place?
Is there a history of trades broken out by the discrete fund or etf? That wouldn't be so bad if there is.
@Derf- I got a small chuckle out of that. Reminds me of the small print in every come-on for phone, TV or internet service I've ever seen: "Additional charges may apply". You better believe it... no "may" about it.
Comments
Regards,
Ted
Interestingly, Yahoofinance charts do not factor in distributions...these charts are merely price charts...M* charts are total return charts.
Here's M* YTD Chart (showing the (-.5% drop):
Here's Yahoofinance (showing the 3.5% price drop in share price):
In the Yahoo chart, the "D"s represent fund dividends that were paid monthly. Since Yahoo's chart is a price chart it does not have a way of charting in these "D"s.
I have complained about this with my brokerage asking them to improve this data point, but to no avail. Since I reinvest dividends, I do the math based on my contributions and my account balance. The balance takes into account total return (including dividends).
Even though your share price has dropped 3.5%, your total return is actually closer to a loss of (-.5%).
I understand their accounting perspective, but it can be rather misleading at times.
Myself, assuming that I've not actually made any additional purchases with "outside money", I look at the gain or loss of any particular holding simply as a total percentage between "time a" and "time b".
I own PONAX. My brokerage features allows me to see the "unrealized gain/losses". See if you have this feature. When I select this feature for PONAX I see:
And so, yes these are losses that could be realized by selling shares. The trick is knowing which shares will be sold and therefore what losses will be realized and tax loss harvested. If you hold very old shares they may have unrealized gains.
A call into you brokerage might help explain that for you.
some brokerages really have this confusingly, I think
Fido has done it right since forever
Derf
Is there a history of trades broken out by the discrete fund or etf? That wouldn't be so bad if there is.
@Derf- I got a small chuckle out of that. Reminds me of the small print in every come-on for phone, TV or internet service I've ever seen: "Additional charges may apply". You better believe it... no "may" about it.