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Q.Why does the Position Performance Summary in PortfolioCenter appear to duplicate additions and withdrawals?

A.The short answer is the report does not duplicate cash flows; it includes internal movements of cash.

Suppose Mr. HappyClient opens a new account and deposits $4000 into the money market.  You brilliantly invest that that money — $1000 each into four different funds.  The total summary line on the Position Performance Summary shows Additions/Purchases of $8000 and Withdrawal/Sales of $4000.  The report looks wrong since there was a single $4000 deposit and no withdrawals.

The Position Performance Summary report is like a college where each security held is a major, the money market is the undeclared, and students starting, graduating and changing majors are the dollars moving in, out and around the portfolio.

Assume you start the year with 4 new students.  Since they are clueless about what they will study, Undeclared majors is now +4 students.  Over the course of the year, all four students declare a major:  one chooses Biology, one Economics, one 19th Century French Poetry and the last chooses History.  Undeclared majors is now -4 students.  Biology, Economics, Poetry and History are now each +1 student.

When each department sends their student totals to the President, the College total includes the movements of students between majors.

Undeclared = +4 additions; -4 withdrawals
Biology = +1 additions; -0 withdrawals
Economics = +1 additions; -0 withdrawals
History = +1 additions; -0 withdrawals
Poetry = +1 additions; -0 withdrawals
Total College = +8 additions; -4 withdrawals = 4 students

Suppose the Poetry major gets wise and switches to Economics, moving briefly through Undeclared in the process.  The College totals would be +10 additions and  -6 withdrawals, and you would know all students remain enrolled.

Undeclared = +5 additions; -5 withdrawals
Biology = +1 additions; -0 withdrawals
Economics = +1 additions; -0 withdrawals
History = +2 additions; -0 withdrawals
Poetry = +1 additions; -1 withdrawals
Total College = +10 additions; -6 withdrawals = 4 students

If the Poetry major drops out to study with a guru in India instead of switching majors, the College totals would be +8 additions and -5 withdrawals and you would know one student has left the system.

Undeclared = +4 additions; -4 withdrawals
Biology = +1 additions; -0 withdrawals
Economics = +1 additions; -0 withdrawals
History = +1 additions; -0 withdrawals
Poetry = +1 additions; -1 withdrawals
Total College = +8 additions; -5 withdrawals = 3 students

The totals on the Position Performance Summary include internal movements of cash in the same way the college total includes movements of students between departments.  Each position functions like a major. Buys and sells move money out of a position through cash and into a new position in the same way students switch majors.

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