Invested Amount
The Invested Amount shows how much money is allocated to a position: it is the acquisition cost of the units the investor still holds. Unlike the market value, it does not follow price fluctuations. The invested amount only changes when something happens to the position, such as a purchase, a sale or certain security events.
That makes it the natural reference to answer the question "how much did I put into this investment?". Compared with the market value, it shows the position's unrealized gain or loss.
How it is calculated
A position's invested amount is the quantity held multiplied by its average acquisition price, in Brazilian reais (BRL):
The average price is the average of the prices paid in the purchases, weighted by quantity. It includes the transaction costs (brokerage and exchange fees) and, for securities traded in another currency, converts each purchase to BRL using the exchange rate informed in the transaction.
The calculation is done daily for each position, that is, for each combination of security and broker. The invested amount of a portfolio, or of an economic group, is the sum of the invested amounts of its positions.
Example
Follow the evolution of a stock position:
| Date | Activity | Quantity | Average price | Invested amount |
|---|---|---|---|---|
| 2022-01-17 | Purchase of 200 shares at BRL 30.00 | 200 | BRL 30.00 | BRL 6,000.00 |
| 2022-06-14 | Purchase of 300 shares at BRL 29.60 | 500 | BRL 29.76 | BRL 14,880.00 |
| 2022-08-12 | Dividends received | 500 | BRL 29.76 | BRL 14,880.00 |
| 2022-09-20 | Sale of 100 shares at BRL 31.09 | 400 | BRL 29.76 | BRL 11,904.00 |
- Second purchase: the average price becomes (200 × BRL 30.00 + 300 × BRL 29.60) ÷ 500 = BRL 29.76, and the invested amount goes up to 500 × BRL 29.76 = BRL 14,880.00.
- Dividends: the invested amount does not change. The dividend is income, accounted for in the Profit & Loss.
- Sale: the 100 shares sold leave at the average price. The invested amount drops by 100 × BRL 29.76 = BRL 2,976.00, and the average price of the remaining shares stays the same. The difference between the sale price (BRL 31.09) and the average price is the gain realized in the trade, which shows up in the P&L, not in the invested amount.
What changes the invested amount
| Situation | Effect on the invested amount |
|---|---|
| Purchase | Increases by the amount paid, including transaction costs. |
| Sale | Decreases in proportion to the quantity sold, always at the average price (not at the sale price). |
| Security price fluctuation | No change. |
| Dividends, interest on equity, interest, income and amortizations | No change. They are cash flows, accounted for in the P&L. |
Return of capital (CASH_RETURN_OF_CAPITAL) | Decreases. The amount returned to the investor is deducted from the average price. |
| Splits and reverse splits | No change. The quantity changes and the average price is adjusted in inverse proportion. There may be a small difference when fractional shares are discarded. |
| Stock bonuses | No change. The new units come in at zero cost, which lowers the average price. |
| Custody transfer | The amount leaves the source broker and enters the target broker at the price informed in the transfer. If no price is informed, the previous day's closing price is used, which may change the invested amount. |
| Initial custody adjustment | When it opens the position, the invested amount starts from the informed quantity multiplied by the transaction price (or, if no price is informed, by the security's closing price on that date). |
| Position closed | The invested amount goes back to zero. |
Note that amortizations do not reduce the invested amount either. For bonds that amortize over time, it keeps reflecting the acquisition cost until the bond is sold or matures.
Special cases
- Offshore securities: since each purchase is converted to BRL at the exchange rate of the trade date, the invested amount of an offshore security represents the historical cost in BRL and does not change with the current exchange rate.
- Savings accounts (poupança): each savings unit is worth BRL 1.00, and the yields credited on the anniversary date come in as new units. Therefore, the invested amount follows deposits, withdrawals and credited yields, and never goes negative.
- Short positions: opening a short position does not require invested capital, so the invested amount starts at zero. From then on, it accumulates the purchases made to cover the position and goes back to zero when the position is closed.
Invested amount, market value and P&L
The invested amount, the market value and the profit & loss complement each other:
- The invested amount shows the acquisition cost of the units held.
- The market value shows how much those same units are worth today.
- The difference between them is the position's unrealized gain (or loss).
- The P&L adds to that result the gains already realized in sales and the income received.
A common view in investment applications is a chart comparing the evolution of the Net Asset Value (NAV) with the invested amount, which shows the portfolio's value against the acquisition cost of the units it holds. This comparison does not split the wealth into contributions and appreciation: a sale, for example, changes the invested amount even when no money enters or leaves the portfolio. The invested amount is also the base Gorila uses to calculate the positions' IRR.
Where to access
In GorilaCORE, the invested amount is available through the following endpoints:
- Read Invested Amount: time series of a portfolio's invested amount, with a choice of frequency (
frequency). - List Position Invested Amount: invested amount of each position of a portfolio, with the option to group the result (
groupBy) by broker, security, security type, asset class or classification level. - Read Economic Group Invested Amount and List Economic Group Positions Invested Amount: the same views for an economic group.
All of them allow filtering by security, asset class, security type, classification and broker. Values are always expressed in Brazilian reais (BRL).
When the startDate parameter is not informed, each returned value is the total invested amount on that date. When startDate is informed, the values become relative to the day before that date: each point shows how much the invested amount has changed since then, that is, the net capital invested (or withdrawn) in the period. For positions opened on or after startDate, both numbers are the same. To get the total invested amount on a date, omit startDate.