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Converting Vanguard index 500 Investor shares to Admiral shares RRS feed

  • Question

  • Vanguard has informed us they are converting our VFINX shares to VFIAX shares in a roth account. (good, making progress!)

    The question is what is the best way to accomplish it?  My thought is to go into "details" and just change the ticker symbol.  Will this work?  Other suggestions?  My system is a Dell Vostro running Windows 7 and Money Plus Deluxe 2007

    Thanks for your help.

    GKE

    Wednesday, October 20, 2010 6:49 PM

All replies

  • Just changing the symbol is a necessary but not generally sufficient step of probably the least bad way to handle this.

    There is generally also a conversion ratio to apply. (They don't swap share for share.)

    You can do this with a "stock split". Of course that has two side effects/issues.

    1) there is a requirement in Money that doesn't exist in the financial world that the split be an integral ratio of 16 bit unsigned numbers. I.e., 3:2 works in Money and rarely applies to these kinds of transactions, but 2.665794:1.78751 which is the kind of ratio that is typical doesn't work directly in Money. There is a calculator at http://umpmfaq.info/IntegralSplits.htm that will help you get a ratio that is very close.

    2) the Split done this way is only Very Close, not necessarily correct. The way around THAT is to go into the Investment Account Register, click Account Summary, and then click Account Update at the bottom. Put in the EXACT NUMBER of shares (147.659 shares, say) from the statement from Vanguard that confirms the swap. This will force Money to update the approximate number from the approximated integral split (say 147.659314159 shares) to the real value by an Add/Remove shares transaction for the fractional error (say Remove 0.000314159 shares).

    Thursday, October 21, 2010 3:11 AM
    Moderator
  • I should add: and pray you don't wind up in the dreaded spurious "negative shares at some point" state that Money all too often wants to wedge itself in.
    Thursday, October 21, 2010 3:14 AM
    Moderator
  • If your Vanguard account is a taxable account, you definitely want to use the rename and split method.

    If the shares are in a non-taxable or tax-deferred account (such as an IRA), you could enter the event as a Sell of the old and a Buy of the Admiral shares. You would make the Totals amounts identical. Then you would start your performance calculations separately in the Admiral shares. That is what I did.

    If you have not been paying attention to the January 2011 cutoff of Money servers, see http://www.microsoft.com/money/faq.mspx Unless you are absolutely sure you could reinstall your Money 2007 or Money Plus (Plus is also sometimes called 2008) from CD into a new computer, I suggest you download and carefully keep a copy of the Money Plus Deluxe Sunset install file.

    Note that you can download from many financial institutions, including Vanguard,after the cutoff. Some will continue to work because you are already set up in Money 2007. PocketSense provides a way for you to download from some new providers later and to get price quotes downloaded into the Portfolio. If you were set up for Vanguard downloads, the conversion event would have downloaded as a RemoveShares and an AddShares. You would want to manually change what downloaded to one of the methods discussed.

     

    Thursday, October 21, 2010 2:37 PM
    Moderator
  • Thanks to both Cal and Dick for your helpful replies. 

    This is my husband's traditional IRA account. I knew that Vanguard would automatically download the conversion this morning, so I waited; and you are right Cal. Vanguard did a shares-out/shares-in transaction.

     Afterward, I checked the ytd performance % in the portfolio manager, imagine my surprise to see a plus 6% more ytd increase than before the transaction making it over 9.5% (nowhere close to reality)! So, seeing how things are skewed, I'm thinking it will be advisable to edit those transactions to a buy-sell. Does the Admiral shares performance then start from scratch?

    I have downloaded the Money Plus Sunset install file to another (lap-top) computer and have loaded my most recent Money 7 backup to it, just to play around and familiarize myself with the program.  Maybe it would be wise to do the buy/sell on that file first to see what the result is.  Our life's history is in the main file back to when MSMoney first came out. It needs to be protected!

    Will try it Cal's way with the buy/sell option first.  I'm lazy; so Dick...your stock split solution is my backup plan.  ;^)

    Forgive my rambling; you can't know how grateful I am for you guys.

    Glenda

    Thursday, October 21, 2010 6:53 PM
  • Thanks to both Cal and Dick for your helpful replies. 

    This is my husband's traditional IRA account. I knew that Vanguard would automatically download the conversion this morning, so I waited; and you are right Cal. Vanguard did a shares-out/shares-in transaction.

     Afterward, I checked the ytd performance % in the portfolio manager, imagine my surprise to see a plus 6% more ytd increase than before the transaction making it over 9.5% (nowhere close to reality)! So, seeing how things are skewed, I'm thinking it will be advisable to edit those transactions to a buy-sell. Does the Admiral shares performance then start from scratch?

    Yes.
    Thursday, October 21, 2010 7:24 PM
    Moderator