Reading Your Statements

 

There are several basic documents you will have available to you for your investing accounts. Each provider will present them in slightly different way, but the basic information will be pretty much the same. For each of these documents, most firms (including Tangerine, TD, and Questrade) will give you separate copies for each of your accounts (non-registered, TFSA, RRSP, RESP).

Trade confirmations will detail the individual buy/sell transactions you make, including the total price paid/received, the number of units traded, and any fees or commissions. They can be a convenient way to track each transaction for your taxable account, but the information will be repeated on your monthly statement. If you have a dividend reinvestment program on any of your holdings, then the purchases made through that will not generate trade confirmations. Note that the default is for TD e-series to reinvest any dividends.

Monthly statements usually detail the total value of each of your accounts, with some indication of your asset breakdown and how much cash you have available. You will have a collection of all transactions through the month, which includes the purchases and sales that would lead to trade confirmations as well as any dividends and reinvested dividends. You will even see cash transfers in or out of the account and foreign exchange transactions.

For the holdings view you will generally see a list of your holdings, and a column for your “book value” and “market value.” These represent how much you paid for each security as well as how much it was worth at the time the statement was prepared, respectively. Note that the book value is usually but not always accurate. That means you can't rely on the book value given in your statements for tax purposes in non-registered accounts: you must track it yourself. An example of where book value is usually wrong is if a stock or fund is merged with another, or changes its name: sometimes the book value updates to the value on the day the change happened rather than what you actually paid for your original holding. It will also be wrong if you have any transactions that adjust your cost basis, such as a superficial loss or a “return of capital” distribution.

Note that if you have a summary of fees paid, these are just the administrative fees such as charges for small accounts or direct trading costs like commissions. The MERs of your funds will not appear on your monthly statement, you will only find these by looking for them in the descriptions of the funds themselves.

Yearly trade summaries for non-registered accounts come out in the early spring to help you prepare for tax season. They are best used as a checklist to make sure you didn't miss any transactions in your record-keeping through the year rather than as your sole source for updating your records and reporting capital gains.

Tax documents will provide your dividends, interest, and other payments through the year in convenient boxes for you to enter into your tax program. They also usually come with a summary of the payments from each fund that led to that taxable income. What you want to look for here is box 42: Return of Capital. In the attached summary you can see how much return of capital was generated by each fund, and enter that amount into your capital gains spreadsheet as an amount reducing your cost basis (what you paid). For the most part every other aspect of your tax documents is much more simple: just enter the values in each of the boxes into the corresponding part of your tax software.

If you have a non-registered account and signed up for electronic statements, be sure to check for your tax statements before filing your taxes. If you typically file your taxes early, keep in mind some slips may not arrive until April.

Example Statements from Each Firm

Tangerine: When a statement is ready you'll get a notification in your “inbox” within the Tangerine web interface. They're also available from the “documents” section, found by clicking your name in the top-right corner. Note that your investing statements will show up about 10 days after your chequing and savings account statements – and for your first statement the placeholder for investment funds won't appear until about two weeks after the end of your first month with Tangerine.

As with everything at Tangerine, the statements are very minimalist and simple. There should only be a single portfolio fund in each of your accounts, and you will see a line item for each purchase or sale near the bottom of the summary listing the total amount, the unit price, and the number of units. They track the average cost per unit for you (book value), but as with all providers the ultimate responsibility is on your shoulders to accurately track it for tax purposes in a non-registered account. The opening and closing balance represent the market value at the beginning and end of the month.

 

TD: You can access your electronic statements – including monthly statements, trade confirmations, and tax documents – by clicking on the “Accounts” tab in the top menu bar, then “Documents (eServices)” option (last one on the left). . TD will provide separate but very similar-looking statements for each of your accounts. On the first page will be a high-level overview of your holdings, with a box on the left side indicating how your portfolio is split up (which you can largely ignore as you will track your asset allocation more precisely yourself), and on the right side a box including lots of useful information like how much you have earned in dividends over the month and year-to-date, how much you have paid in fees and commissions, and for registered accounts, a summary of your contributions and withdrawals. Then any transactions will be listed, followed by a summary of your current portfolio (which will likely run onto the second page).

Some transactions to watch out for, especially in non-registered accounts, are reinvested dividends (DRIP). These don't generate trade confirmations, so the monthly statement is the only place they will show up. Below, I've included a sample of one of my statements with some TD e-series funds with reinvested dividends. Notice that under the far-right column there is nothing for “credit” – these units are being purchased directly from the distribution as it happens. Under price “DRIP” appears to designate that it is a reinvested dividend, and the price itself appears in the second line under description. So for the first one, I had 4.635 units of the TD e-series Canadian Index purchased for me at a total value of $97.33. Where did that $97.33 come from? It was the December distribution (dividend) from my TD e-series Canadian index holdings.

 

 

Questrade: Their statements are broken up into multiple sections across several pages. This gives you multiple views into what your account is doing and can help with understanding what is happening – though it does use a lot of paper if you choose to print them off. They provide a breakdown of your allocation between cash and ETFs, but don't break down the ETFs into their own asset classes (Canadian versus international equities, etc.), though the second page of the Investment Details section will detail your allocation item-by-item (excluding cash).

Their Activity Details section is where you will find most of the important information you need. First is a cash changes page that groups your various transaction types together, including purchases, deposits, commissions and fees, dividends, etc. to give you a quick at-a-glace picture of the activity in your account.

Following that is the transactions list, which will be useful for tracking your purchases and sales for tax purposes. Canadian and US dollar transactions are clearly separated into different columns. The quantity (“Qty”) and price per unit (“Price”) are pretty self-explanatory, as is the commission (“Com”) column. The “Gross” column represents the total amount invested before commissions and fees – simply quantity times price per unit – and purchases appear as negative amounts (in brackets). The net amount then is the book value for the purchase, including commssions.

In addition to the general information on portfolio allocation and returns, you may wish to refer to the Position Details section, particularly the Exchange Traded Funds Owned page, which will detail the book value and market value of your ETF holdings. This table holds much of the same information covered in the other companies' statements. One unique addition is a column called “Cost basis” that indicates what method Questrade is using to report the cost or book value in your statements – their “BK” (book) method indicates that it will account for return-of-capital distributions. I will again note that the ultimate responsibility lies with you to ensure everything is tracked and reported to the Canada Revenue Agency correctly.

To translate the other column headings, “cost/share” is the per-share book value or cost basis, including any commissions or ECN fees. “Position cost” is the total book value, “Mkt. price” and “Mkt. value” are the per-share and total market values as of when the statement was prepared (usually the last trading day of the month). The “P&L” column takes the difference between market and book values for you, to show you in dollars and cents how much you are up (or down) on your investments – note that this is your unrealized or “paper” gain/loss, and you would need to pay a selling commission before being able to collect that money, in addition to any day-to-day or minute-to-minute changes in value on the exchanges. The next column “% return” simply puts this profit/loss into a percentage of the book value, and “% port” is how much this holding represents of the overall portfolio.