Just noticed a somewhat unusual corporate action that seems to have fallen through the cracks on the P123 side. I currently own BDX in my Healthcare Strategy, and unbeknownst to me on Feb 9th of last week BDX sold one of its units to WAT in a stock transaction. BDX as a company still exists and the number of shares I own of BDX has not changed (although presumably their value has changed), but I am also now the proud owner of shares of WAT as well.
The issue is that the Portfolio123 system did not catch this change. My Live Simulation and Books do not list any holdings of WAT stock. I caught this discrepancy because I periodically (about once a month) run a reconciliation routine to make sure my holdings in Fidelity and P123 match.
I am not sure what percentage of P123 users do the same, but it is possible that users could be holding shares of companies and not realize it. Does P123 have any kind of logic in place to handle corporate actions of this type?
Presumably this issue also creates problems for portfolio return and value calculations as the value of the spinoff isn’t reflected in the returns of the Live Simulations and Books holding the parent company.
Just realized that P123 did catch the corporate action, but handled it incorrectly. P123 reflects the Corporate Action as a Cash Dividend from BDX, while the actual transaction was an equivalent value of WAT stock. This should take care of the return and value calculation issue, but only if the user immediately liquidates their holdings of WAT stock (which they may or may not be immediately aware of owning).