Bond records at Vanguard

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bertilak
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Bond records at Vanguard

Post by bertilak » Sat Oct 28, 2017 12:13 pm

I transferred bonds from a non-Vangurd brokerage to Vanguard.

There is a mismatch between the number of bonds, the price of the bonds and the total value of the bonds, as it is now listed by Vanguard. I believe the discrepancy is due to the fact that the bonds are callable., and some have actually been called. Here is the info for one of them (note there is a factor of 100 involved when stating the number of bonds):
  • Bond: Countrywide
    Original broker's quantity purchased: 15000 (This is in normal sized print.)
    Original broker's Remaining bonds after some were called over the years: 5545.454 (This is in small print.)

    After the transfer:

    Vanguard's Current quantity: 15000
    Vanguard's Current price: $87.543
    Vanguard's Current balance: $4,856.37. Note that multiplying the above two numbers does not match this.
The discrepancy, as I see it, is that the Vanguard numbers don't add up:
  • $87.543 times 150 equals $13,131.45 which does NOT match $4,856.37
  • $87.543 times 55.45454 equals $4,854.66, which DOES match $4,856.37 (nearly, with difference likely due to rounding error or date recorded)
Seems like the number of bonds transferred is incorrect even though the $ amount is correct.

What happens if I sell some of 15000 bonds Vanguard credits me with having? Do I get the full market price for each? What if I sell more than the 5545.454 I think I really have?

Can anyone explain this? If no one can, I will ask Vanguard on Monday but I would rather see an answer in writing than trying to understand a complicated answer over the phone, perhaps after getting transferred around for a bit.

QUICKEN NOTE: The download from Vanguard to Quicken shows 15000 and $87.543 totaling $13,131.45. My Quicken account value did not match Vanguard's web page and since this bond is mixed in with a bunch of other assets it took some hunting to find the discrepancy and then some more hunting to see that some of the bonds were recalled.

EDIT: Minor wording change to make it clear that some of those bonds were called.
Last edited by bertilak on Sat Oct 28, 2017 7:39 pm, edited 1 time in total.
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ThePrune
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Re: Bond records at Vanguard

Post by ThePrune » Sat Oct 28, 2017 7:05 pm

bertilak wrote:
Sat Oct 28, 2017 12:13 pm
After the transfer:

Vanguard's Current quantity: 15000
Vanguard's Current price: $87.543
Vanguard's Current balance: $4,856.37. Note that multiplying the above two numbers does not match this.
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The discrepancy, as I see it, is that the Vanguard numbers don't add up:
  • $87.543 times 150 equals $13,131.45 which does NOT match $4,856.37
  • $87.543 times 55.45454 equals $4,854.66, which DOES match $4,856.37 (nearly, with difference likely due to rounding error or date recorded)
Seems like the number of bonds transferred is incorrect even though the $ amount is correct.
Yes, I see what you mean. I get the same final dollar amounts you do (but did the math a little differently). I even looked at how my own bonds were listed at Vanguard to make sure I (we) weren't doing something wrong with the numbers they use in the website listings.

For others who read and might not be familiar, the quantity listed by Vanguard is the face value of the bonds expressed as a number. So "15000" is usually 15 bonds, each having a $1,000 face value.
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stlutz
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Re: Bond records at Vanguard

Post by stlutz » Sat Oct 28, 2017 7:55 pm

Do you have a CUSIP number for the bonds? That may help with looking into what is going on.

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bertilak
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Re: Bond records at Vanguard

Post by bertilak » Sat Oct 28, 2017 8:11 pm

stlutz wrote:
Sat Oct 28, 2017 7:55 pm
Do you have a CUSIP number for the bonds? That may help with looking into what is going on.
The CUSIP for the Countrywide bond mentioned above is 23242WAM1.

I was able to look that up on Vanguard's "Holding Details" web page and Lo and Behold while I was there I saw something called the "Bond factor rate." For this holding it is 0.36982773999999996 (whew!). That is the exact multiple that makes all the numbers match!

I will see if there is some way to get that into Quicken. If not, I will just manually adjust the number of bonds by that factor. Luckily I have only three bonds in this situation so I should be able to manage things in Quicken manually if the bonds are sold or called back.

Thanks for making me look!
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bertilak
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Re: Bond records at Vanguard

Post by bertilak » Mon Oct 30, 2017 2:57 pm

UPDATE:

I believe that what's going on with this bond is NOT a bond being called. My understanding is that this is what is termed a "factor bond" and I believe that means there have been (and will be) returns of capital. I'm guessing that happens as part of dividend payments.

Quicken has a transaction called "Return of capital" but I tried to enter a sample transaction and it didn't work as expected. I will wait for the next time and see what transaction(s), if any, get downloaded from Vanguard.
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