This section describes how to create the fields used for mutual fund processing.
About Mutual Fund Fields
Each distribution and expense field that you maintain needs to be linked together with the reinvestment date and default tax rate to use for the field. For example Income Distribution would be configured to use Income Reinvestment Date.
This is done using a special Mutual Fund field attribute, as shown in the following figure.
Configure one field attribute for each type of distribution or expense that is used by the return calculator. All of these fields should point to columns on the NAV table. There are five mutual fund attribute processes, as described in the following table.
| Process | Description |
|---|---|
Distribution | Set a reinvestment date and default tax rate for each field. |
Expense | Set a reinvestment date for each field. |
Return of Capital | Set a reinvestment date and default tax rate for each field. Differentiates these events from other distribution types and automatically invokes processing retroactively to adjust the cost basis for each set of prior shares for post liquidation processing. |
Retained Gain | Set a reinvestment date, default tax rate, and secondary tax rate for this field. The secondary tax rate is for specifying the corporate tax field so that the excess tax payment can be calculated. The second tax rate is required to derive the excess tax payment equal to: (Retained gain * long term tax) - (Retained gain * (1-corporate tax rate)) |
Waiver/Subsidy | Set a reinvestment date for each field. |
About Price Fields
The dynamic mutual fund field processing in is a multi-step calculation. A NAV is required at three points of time during processing.
- Determine the begin date of performance period and assume a hypothetical $1000 purchase at that day’s NAV (adjusted for applicable front end loads).
- Gather reinvestment history and assume purchases at the NAV on each reinvestment date.
- Determine the end date of the performance period. Derive the end of period value based on accumulated shares and the NAV as of the end date. (Adjust for any applicable back end loads).
There is a:
- Buy price for initial investment
- Reinvest price for shares acquired through reinvestment of distributions
- Sell price to determine value at end of performance period.
PACE allows user-defined configuration of which value in the database is used for each of these three prices. The installation or upgrade database scripts insert the three internal field attributes listed in the following table for these fields.
| Field Attribute ID | Field Attribute Description | Field Name | Database Name | Table Name |
|---|---|---|---|---|
| 305 | Buy Price | NAV_PER_SHARE | HOLDING | NAV |
| 306 | Reinvestment Price | NAV_PER_SHARE | HOLDING | NAV |
| 207 | Sell Price | NAV_PER_SHARE | HOLDING | NAV |
You can change these fields if needed. Here is an example of why you might need to change these internal field attributes:
- A daily file could have separate columns for NAV and MARKET PRICE. Open end funds only have a NAV but closed end funds have both a NAV and Market Price. (Or could be two separate files)
- Uploaders are built (based on available files) to load data to requisite columns. For this example, assume that NAV and MARKET PRICE are in the same file.
- Open-end funds load NAV to both the NAV_PER_SHARE and MKT_PRICE
- Closed end funds load NAV to NAV_PER_SHARE columns and the market price to the MKT_PRICE
The following table lists examples of changed price fields.
| Field Attribute ID | Field Attribute Description | Field Name | Database Name | Table Name |
|---|---|---|---|---|
| 305 | Buy Price | MKT_PRICE | HOLDING | NAV |
| 306 | Reinvestment Price | NAV_PER_SHARE | HOLDING | NAV |
| 207 | Sell Price | MKT_PRICE | HOLDING | NAV |
Based on these field attributes, PACE would use the values from the MKT_PRICE column for both the buy and sell price. However, it would also use the value from the NAV_PER_SHARE column when calculating new shares from reinvestment of distributions. Since the open end funds have the actual NAV stored in both columns, an accurate return can be calculated.
Similarly, since all closed end funds have the market price stored in the buy and sell columns, (and the NAV in the reinvest price column), an accurate return can be calculated without having to create multiple dynamic return fields in the Performance Analysis report.
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