On a monthly basis my brokerage (Vanguard) shows a dividend which is reinvested (dividend → buy) in the money market security held in my sweep account (PP’s deposit account). This case, in which there is not a security account associated with the money market fund (e.g. all transactions are internal to the deposit account). Currently when I import dividend/buy, my deposit account in not in sync with the brokerage balance. I need some guidance as to how to handle these transactions in PP. Thank you!
To be honest, I don’t understand your question!
When it is all internal, why are you getting import files? And if it’s with dividends and buy, where does the difference come from?
Vanguard provides a list of transactions (dividends, buys …) in their export file. This includes the reinvestment of dividends generated by a money market kept in my sweep account (the account used to fund purchases). In this brokerage account, I only have money in my sweep account (I have not purchased any securities), so in PP, security account =0, deposit account = value of money market + dividends. The PP model assumes that dividends would be temporarily moved to the sweep (deposit) account which is then used to purchase the dividend yielding security in the PP security account, but in this case there is no security account involved in the transaction. So, I am trying to understand how this type of transaction (internal to a deposit account) should be represented.
Can you provide an actual example how this transaction shows up in your accounts? I’m not participating in any DRIPs but my understanding is that a dividend - instead of being payed to your sweep account is reinvested to buy more of the stock, i.e. at the end of the day your security account should contain more of said securities. So I’m not sure what exactly you mean with
So your dividends are used to buy something but the bought stocks don’t show up anywhere? Or is there a third account where these stocks end up? If yes, create a second depot in PP with the sweep account as reference account where you handle all the DRIPs
This is from Vanguard. VMFXX is the money market held in my sweep account (used to fund stock purchases). In this case VMFXX generates a dividend which accrues in my sweep account); it is not used for reinvestment (this is not a DRIP). Note the share price of zero indicating this dividend is internal to the sweep (PP deposit) account and does not involve a PP security account.
So it seems like a dividend and buy transaction. Is the amount of bought shares really 0 or is it maybe a decimal amount like 0,001?
Otherwise I don’t understand how the product works? When you really invest something (the dividend in this case) and get nothing that only could be internal.
I think this is what in Germany is called a “thesaurierender Fond”. In english this is commonly called an “accumulating fund” but “reinvesting fund” is an alternative name for it.