How to track a Dividend Reinvestment Plan

As explained by Investopedia: “A dividend reinvestment plan (DRIP or DRP) is a plan offered by a corporation that allows investors to reinvest their cash dividends by purchasing additional shares or fractional shares on the dividend payment date”. While deciding whether or not to proceed with a dividend reinvestment plan might be a straight-forward decision for most investors, the reality is that if they do proceed with the DRP, tracking all those reinvested dividends and properly calculating performance can be a nightmare. As stated by a long-time Sharesight client Mike Deam:

One of the issues with DRPs is the paperwork it creates. If you hold a share and reinvest it for 10 years at 2 DRPs a year, you end up with over 20 acquisition events to manage. Add to that issues, bonus issues, share top-up plans… well you get the picture.”
– Mike Deam

How to track a Dividend Reinvestment Plan

The good news is that Sharesight takes the hassle out of tracking DRPs. Our dividend reinvestment plan feature allows you to activate a DRP for a particular holding and automatically track the dividends reinvested. Alternatively, you may manually reinvest a specific dividend, at the correct reinvestment price. Here’s how to get started:

  1. Sign-up for a Sharesight account and add your holdings. Sharesight will automatically backfill past dividends (and continues to add new ones as they are announced).
  2. If the holding is ASX or NZX listed, you may activate the Auto Dividend Reinvestment feature*, which will automatically reinvest all dividends. Otherwise, you may choose to manually record a dividend reinvestment when you add or edit a dividend payment. Either way, when a dividend reinvestment is recorded, a dividend reinvestment trade for the new shares is recorded in your portfolio, in addition to the dividend record.

Note that Sharesight does not account for rounding where the share DRP account acts like a bank with a carry-over balance, or where discounts are given on the price. You would need to manually review and adjust the dividends in those cases. However on the whole, Sharesight greatly eliminates the headaches associated with traditional record-keeping by automatically tracking most DRPs (not to mention other corporate actions, and trades). Furthermore, Sharesight also lets you attach official dividend statements to dividend records within your Sharesight portfolio. Here’s a handy tip if you don’t have electronic copies of your dividend statements:

Sharesight is particularly helpful because it lets me store the dividend statements with each dividend. If you don’t have an electronic copies of your statements, and don’t have a scanner handy, then try the TurboScan smartphone app.”
– Mike Deam

For more information, visit our help pages on the dividend reinvestment plan feature and recording trades, dividends, and adjustments.

*Please note that this option is only available for ASX or NZX listed companies that have offered a dividend reinvestment plan and for which we have the DRP data available.

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We’re looking for marketing superstars

Are you passionate about marketing and eager to grow your skill-set? Do you thrive in a fast-paced, hands-on environment?

We're looking for marketing superstars

We’re looking for a Marketing Coordinator and an Analytical Marketing Manager to help grow Sharesight — the investment portfolio tracking & reporting system already used (and loved) by thousands of DIY investors and finance professionals around the world. Because we’re a SaaS-based FinTech, the majority of the work is digital and data-driven. So we’re looking for marketing superstars with proven technical abilities who are able to quickly adapt and learn new skills.

A day in the life of the Sharesight Marketing Coordinator

A typical day as Marketing Coordinator might include: bidding on PPC keywords, writing a blog post, analysing data to draw conclusions about user behaviour, managing a nurturing campaign, and sharing our latest product enhancement news on our social media channels. You need to be comfortable working in a tight-knit team, wearing many hats, juggling a few different tasks at the same time, and taking ownership of your projects through to completion.

A day in the life of the Analytical Marketing Manager

A typical day as Analytical Marketing Manager might include: diving deep into customer behaviour data to determine what features to prioritise, running an A/B test on a landing page aimed at a new market, making tweaks to our AdWords account, developing a campaign to convert clients to our paid products, and analysing customer churn data.

For more information, check out the postings below and apply ASAP if you think you’ve got what it takes:

Sharesight Marketing Coordinator

Sharesight Analytical Marketing Manager

How to handle the M2 Vocus merger to account for CGT

ASX-listed telecom companies M2 and Vocus announced a merger to create the region’s 4th largest telco by market cap and to realise cost savings by combining operations.

What the merger means for investors

For M2 shareholders, this means that your M2 shares (MTU) will be converted into Vocus (VOC) shares at a set ratio. While the merger does not result in an immediate tax event due to rollover relief, you may be subject to capital gains tax if you sell your newly acquired Vocus shares within the next 12 months.

While this corporate action is deemed a merger, it more resembles Vocus taking over M2 for the purposes of your investment portfolio.

How to handle the M2 Vocus merger

How to handle the M2 Vocus merger in Sharesight

Fortunately, Sharesight makes it easy for investors to handle corporate actions, even complicated demergers, and to track the capital gains tax implications. Using Sharesight to track this merger will also maintain an accurate record of your portfolio performance.

Please note that we always advise you to consult your financial advisor or accountant regarding corporate actions, especially for tax purposes, as we are not authorised to provide financial advice. The information below, including the dates is subject to change. We encourage you to review the offical M2 Vocus merger document for full details.

Follow these steps to handle the M2 Vocus merger in Sharesight:

  1. Remove your M2 holding by recording a sell transaction at the cost base so that no CGT is calculated. If you have several M2 transactions you can obtain your cost base data by going to the Historical Cost Report found in the Reports menu. Set the sell date to 8 February 2016. (see screenshot below)
  2. To reflect your new Vocus shareholding, first calculate how many shares you’re entitled to based on the officially announced ratio of 1.625 Vocus shares for every 1 M2 share.
  3. Add a new holding and use the opening balance feature. This allows you to enter a cost base which is used for CGT reporting (the original cost base of your M2 shares in this case), but performance reporting will be calculated based on the change in market value from the opening balance date. Use 8 February as the opening balance date. (see screenshot below)

Note: using this approach means that your CGT report will not account for any CGT discount if you choose to sell your newly acquired Vocus shares in the next 12 Months. For tax purposes you may consider backdating the opening balance date as required when you run a CGT report, or downloading the CGT report into Excel format and making a manual adjustment.

Record a sell trade at your cost base for M2:

M2 Vocus merger

Record your new Vocus shares by using an opening balance:

M2 Vocus merger

What happens if I own both M2 and Vocus prior to the merger?

If you already owned VOC before the merger, using an Opening Balance transaction (per step 3 above) would not work.

In this instance, you should enter a new Buy transaction/s (for VOC) which emulates the dates at which M2 had originally been bought. You should adjust the quantities based on the ratio 1:1.625 (M2:VOC).

Note: If you have a large number of M2 trades, you can download the All Trades Report in Excel and filter out M2 specifically. This way you can obtain all of the necessary information, including dates and prices, while still adjusting the quantity per the merger ratio.

As long as all of the past dividends in Vocus have been confirmed, entering these new Buy transactions should not affect any dividends that have been recorded and confirmed in VOC, only future dividends going forward.

By using the M2 purchase dates as the dates for the new VOC shares, this should allow for rollover relief for CGT purposes.


For most investors these corporate actions can be time consuming and confusing. Sharesight provides you with the tools and technology to keep your portfolio up to date. And remember to check our customer forum for steps to handle these corporate actions and to interact with other investors.

FURTHER INFORMATION

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New: Sharesight Pro Portfolio Search Tool

Great news for Sharesight Pro clients managing a large amount of portfolios: we’ve added a portfolio search tool to the Sharesight Pro dashboard, making it easier to search and filter by client portfolio names:

Sharesight Pro Portfolio Search Tool

A few notes on the new Sharesight Pro dashboard portfolio search tool:

  1. The search will return results when two or more characters are entered, or display ‘no results’ if no results are found.
  2. Results are displayed in alphabetical order with one exception: if a portfolio name starts with the exact search value, then that portfolio will take precedence.
  3. A maximum of 10 results will be displayed within the dropdown list.
  4. Only those portfolios that are available to the user will be returned. So a staff user’s search results will only include those portfolios they normally have access to within their dashboard.
  5. Clicking on a search result (the portfolio name) will take you to that portfolio.

We hope this feature will help you with the day-to-day management of your Sharesight portfolios. If you have any questions, please contact your Account Manager.

How to confirm your trades with the Contract Notes Inbox

Using our Broker Email Import feature to automatically capture your on-going trades is the best way to keep your portfolio up to date. But there are occasions when Sharesight might not be able to process your contract notes.

This is where the Contract Notes Inbox feature comes in handy. It allows you to review the contract notes your broker has sent to Sharesight and see which ones have worked and which ones have failed – and why they failed. While you’re there, you may also download the contract note PDF attachments that were sent to Sharesight. So by checking the Contract Notes Inbox, you can double-check that your trades are being received by Sharesight, and easily troubleshoot any issues that may have occurred.

Contract Notes Inbox from Sharesight

In addition to bringing to light your performance as an investor, our aim is also to provide a necessary record-keeping feature. The more information you store in Sharesight, the more automated your admin will become, and the less reliant you’ll be on third parties like registries and brokers.

Using the contract notes feature around the world

Sharesight only processes PDF contract notes from brokers in NZ and Australia. And if you trade via CMC Markets Stockbroking or ANZ Securities, you can automatically link your accounts using the Sharesight Connect API instead of relying on contract notes. Follow our blog and forum to learn about connectivity to other brokers and regions in the near future.