My investment return - which one is correct?

tel_

I use Interactive Brokers for buying shares in US companies, but I've come across an issue when calculating my end-of-year wealth which I compile manually on a spreadsheet.

Interactive Brokers shows a total return from my shares standing at 51,387 in Pounds, but because IB shows each individual US stock in Dollars, I've been using Google's currency converter to convert from USD to GBP for my spreadsheet. When I've then added-up all the stocks now converted in GBP, the figure stands at £43,446. A big difference of £7,941!

I can understand with currency converters there can be differences, but to this much of a disparity, is this possible? And which figure should I go with for my spreadsheet?

I wonder if I held my stock with another provider, would this give me a totally different figure as well?

Any thoughts are most welcome.

masonic

Most brokers only consider current holdings and the weighted average price you bought them in order to determine the gain. This aligns with CGT methodology. However, if you ever sell shares, then you will crystallise a gain or a loss and this will be removed from your return figure.

What are you trying to calculate? If it is the performance of your portfolio as a whole, then these are not the figures to use. You should be looking at your contributions (and any withdrawals) to the account in £ over time vs the current overall value in £ to compute the internal rate of return, or unitising the portfolio. Both methods are well explained online.

Woodstok2000

What do IB show as your return in USD? What exchange rate did you get from Google?

tel_

masonic said:

Most brokers only consider current holdings and the weighted average price you bought them in order to determine the gain. This aligns with CGT methodology. However, if you ever sell shares, then you will crystallise a gain or a loss and this will be removed from your return figure.

What are you trying to calculate? If it is the performance of your portfolio as a whole, then these are not the figures to use. You should be looking at your contributions (and any withdrawals) to the account in £ over time vs the current overall value in £ to compute the internal rate of return, or unitising the portfolio. Both methods are well explained online.

I log in to all my investments - S&S ISAs, SIPPs, at the end of every year, to see my overall net worth, and return for that year. All my other investments give me the returns in £, it's just the individual stock figures I have to convert into £, as I don't think there is a feature on IB that lets you see each individual stock in a £ valuation.

tel_

Woodstok2000 said:

What do IB show as your return in USD? What exchange rate did you get from Google?

I don't think it gives me the total amount in USD, only GBP.

On IB it does say exchange rate 1.00, but doesn't state if that's GBP or USD. Google gave me GBP 1.00, USD 1.34