Handling stock splits in PortfolioCenter is usually seamless — that is, you can usually post the downloaded transaction “as is.” But sometimes split transactions require manual intervention. Here’s what to check:
Trade Date: Make sure the trade date is the date that price changed.
For instance, Schwab downloaded the recent UltraShort S&P 500 ETF (SDS) split with a trade date of 10/08/2012. Checking the price history reveals that the 10/04/2012 price was $13.231 and the 10/05/2012 price was $52.921. For best results, change the trade date on the split transaction to the date the price actually changed (10/05/2012 in this case).
Why change the date? Assuming you break intervals around large cash flows, you may have an account that breaks the interval around the date of the split. You will skew your performance returns if the number of shares jumps without a corresponding increase in price. Granted, this event may be rare, but I find it’s easier to prevent a problem than troubleshoot it later.
Symbols: You can usually block split transactions with temporary symbols.
Sometimes a reverse split will be downloaded as two transactions: one transaction has a temporary symbol and the second has the actual symbol, as was the case in the Schwab downloads with the 10/05/2012 split of Proshares Ultrashort Gold ETF (GLL).
To quickly process this split, sort your transaction list by symbol and block the splits with a temporary symbol. Then, find the first transaction with the real symbol and make sure it has the proper split ratio. Say “yes” when PortfolioCenter asks you if you want to globally update all the split transactions.
Split ratio: Make sure the split ratio is correct.
To calculate the split ratio, divide the final number of shares by the original number of shares. If you don’t know the final number of shares, run a shares reconciliation report without posting any split transactions.
For example, GLL was a 1:4 stock split. If your client started with 200 shares and ended with 50 shares, the split ratio is 50 ÷ 200 or .25