Transaction

Figure 1. Transaction menu.

In PortfolioPerformance (PP), a transaction represents an operation that alters the state of a portfolio; for example, a deposit will increase a deposit account. As depicted in Figure 1, there are 15 transaction types. Security transfer ... and Transfer between accounts ... deviate slightly from the others and only appear when there is more than one security and/or deposit account. The transactions can be grouped into pairs of operations that have opposite effects:

  • Buy/sell: Buying an asset will increase the value of a security account and decrease a deposit account, whereas selling an asset will have the reverse effect.
  • Delivery (inbound/outbound): Inbound delivery will add securities to a security account, while outbound delivery will remove them. The deposit account remains unaffected.
  • Deposit/Removal (or withdrawal): Depositing or withdrawing funds will respectively increase or decrease the value of a deposit account.
  • Interest/Interest charge: Receiving interest entails an increase in a deposit account, whereas paying interest leads to a decrease.
  • Fees/Fees refund:Paying a fee entails a withdrawal from a deposit account, while receiving a refund involves a deposit.
  • Taxes/Taxes Refund: Taxes are settled by withdrawing funds from a deposit account; conversely, a tax refund results in a deposit into the account.

Note

In theory, PP could suffice with 8 transaction types: trade, delivery, deposit, fees, taxes, interest, transfer, and dividend. Each transaction could be expressed with a positive or negative value, for example: sell or trade(-) and buy or trade (+).

In fact, this is suggested by the fact, that the type of a transaction could be changed in a table such as All Transactions by double clicking on the keyword (e.g. Buy) and choosing the alternative from the drop down (sell, delivery inbound, delivery outbound). This technique doesn't work with fees and taxes.

Figure 2 illustrates the effect of all 15 transaction types on the deposit and securities account. Analyzing Figure 2 will clarify the impact that each transaction type has on a portfolio.

  • Security accounts are exclusively impacted by buy, sell, delivery (inbound & outbound), and Security Transfer transactions. This likely explains why they are grouped together with a divider line (see figure 1). It's important to note that while a buy/sell transaction affects both deposit and security accounts, delivery and security transfer transactions do not. A delivery is essentially a buy/sell transaction without the involvement of deposits and is represented as originating from outside the portfolio.

  • All transaction types, except delivery and security transfer (see above), will affect the deposit account. These effects could manifest as inflows (green color) or outflows (red color).

  • The coloring scheme might be a bit confusing. In the image on the left side of Figure 2, which represents the All Securities view, a buy transaction results in an outflow from the deposit account, yet it's depicted in green. Conversely, a transfer (from one security/deposit account to another) is depicted in red.

  • With the exception of interest, all transaction types are associated with a specific security, such as a share. Interest, on the other hand, is only linked to a deposit account. One implication of this is that interest on bonds should be recorded as a dividend in PP if you wish to maintain the connection with the bond.

Figure 2. All 15 transaction types with their effect.