If you have been a client of ModernAdvisor for some time, you may have noticed some new activities posted in your activity feed as of late October 2022.
We have recently updated the Notable Activities section of your client dashboard to include Buy and Sell transactions that occur in your account:
The Buy transactions show the funds or other securities that are purchased in your account and the total transaction dollar amount. Sell transactions show what is sold in your account and the total proceeds of the sale.
The letters after the words "Buy" and "Sell" are the fund identifier, also known as the ticker symbol. For example, in the screenshot above, "VUS" is the ticker symbol for Vanguard US Total Market Index Exchange Traded Fund (ETF).
What triggers buys and sells in your account?
A few events can trigger a buy or sell transactions in your account:
When the market moves, not all funds go up or down in the same direction or by the same amount. This will result in the weight of some funds exceeding their target, while others could have a weight below their target. If any of the funds have a weight that is more than 5% below or above their target, then the account would be rebalanced by selling the overweight positions and buying the laggards.
If you make a deposit to your account that increases the cash balance to more than a specified threshold, then we buy one or more of the funds that are below their target weights.
Most of the funds we invest in pay a cash dividend. As cash dividends are paid and the cash balance in your account grows, we buy one or more funds in your account to keep you close to fully invested.
If you make a request to withdraw cash from your account, we may need to sell one or more of the funds to raise enough cash to meet the withdrawal request.
If you change your investment goal, timeframe, and/or have a change in your financial situation and update your profile accordingly, you may be recommended a different risk level than your account is currently invested in. As a result your account will need to be rebalanced, which will result in buying and selling activity in your account.