Price fluctuations Marlborough UK Micro Cap Growth P Acc

erb

Does anyone know why this fund's price fluctuates by over 3% nearly every day or so?

One day it is up over 3% and the next down 3% which I don't think can be due soley to market prices of the over 100 shares this fund invest in. See the blue line on the graph below, the red is the smaller companies index.

Cumulative Performance chart

bowlhead99

Could just be the quality of the data feed -seems flatter on Morningstar. Although maybe Morningstar graphs are artificially smoothing it. Have you checked the data from the horse's mouth, i.e. the manager themselves?

https://www.morningstar.co.uk/uk/funds/snapshot/snapshot.aspx?id=F000005ICX&tab=13

Potentially, daily adjustments to accommodate the scale and direction of subscriptions and redemptions if this isn't one that is already dual priced?

3% does seem high but if the FTSE moves half a percent the smallcaps can move a big multiple of that. The nature of micro cap is high spreads and prices that can move by big percentages. This gets averaged out in an index or "fund universe" benchmark which doesn't show the spread anyway, but if a fund has high conviction it can be volatile. The fund has a lot of little holdings but there will be relatively more weighting in the top 50 than in the bottom 200

BrockStoker

I had been wondering the same myself. I have the "A acc" share-class of the same fund, and although the spikes are in different places compared to the "P acc" share class, they are still a feature.

My guess is that the spikes are caused by large chunks of shares being bought/sold. If you look at the "B" share class for comparison there are significantly fewer spikes, and I suspect this is because most people in this share class are committed to the long haul.

Either way the spikes make this fund a real minefield when it comes to buying/selling. I was lucky and just topped up my fund a few days ago - today it spiked back up again!

masonic

BrockStoker wrote: »

My guess is that the spikes are caused by large chunks of shares being bought/sold. If you look at the "B" share class for comparison there are significantly fewer spikes, and I suspect this is because most people in this share class are committed to the long haul.

It wouldn't necessarily need to be large chunks of shares. Possibly the effect of net inflows (where underlying shares are bought and then valued on that offer price), vs net outflows (where underlying shares are sold and then valued on bid price)?

BrockStoker

Here are the A (Plot A), B (Plot , and P (Plot C) share classes all on the same graph:




Besides the spikes, I find it interesting that the A class shares are outperforming the P class shares for a significant part of the time. That's something (else) I wasn't expecting!

EruditeLuddite

Fascinating.


I came across this thread as I noticed this fund was fluctuating (on Hargreaves Lansdown), and Googled in case it had been commented on before. Looks like it happened Oct 2015 (this thread) and is happening again this October.


Why would that be? And, as per previous poster, I'm reluctant to try to time my purchase/sale to avoid a spike/dip!

jamei305

Has anyone got an idea of why this might be?

I have never come across any other fund that experiences this:



It's a bit like there being the possibility of a 3% initial fee and a 3% sale fee, applied randomly and which you won't know about until it's too late.

Malthusian

I have - bricks and mortar property funds, although admittedly not as many spikes as that.

AIM shares can be illiquid and it doesn't surprise me that if someone wants to make a large withdrawal from the fund, the fund switches to the "offer" price, to reflect the fact that if you want to dispose of that many shares in micro-cap companies quickly at any price, there'll be a cost.

RedbullRJ

I appreciate this thread is old, but as it comes up on a Google search I thought I would share some information with a similar situation I had. I sold some of this fund and was a bit miffed about the prices dropping 3'ish% the day I sold and rising back up the next day. I looked into this, contacted HL and Marlborough directly and, buried in their literature, is the conditions below. I can’t say whether the quoted prices shows the big drop on the days anyone does a £15k plus sale or if it is for other reasons, just please be aware not to sell more than £15K in a day, this would include cumulative smaller amounts across your ISA/SIPP/share accounts. I did suggest to HL they may like to bring this to clients attention, as a 3% loss for the sake of splitting the sale over more than one day is an expensive mistake

From SUPPLEMENTARY INFORMATION DOCUMENT (SID) on Marlborough website, which also gives details of current cancellation and normal prices:

Cancellation Price – Dual Priced Funds

In a dual priced fund where an investor
sells over £15,000 in value of their units,
either singly or as a combination of
smaller deals for the same valuation
point, we may sell those units at
‘cancellation price’. This is the lowest
price calculated for a dual priced fund
and is based on the selling price of
all the stocks and shares within the
fund. This action is used to protect the
remaining investors within the fund as
we may have to sell some of the fund’s
own investments in order to raise the
money to pay the proceeds of a large
deal.

george4064

RedbullRJ wrote: »

I appreciate this thread is old, but as it comes up on a Google search I thought I would share some information with a similar situation I had. I sold some of this fund and was a bit miffed about the prices dropping 3'ish% the day I sold and rising back up the next day. I looked into this, contacted HL and Marlborough directly and, buried in their literature, is the conditions below. I can’t say whether the quoted prices shows the big drop on the days anyone does a £15k plus sale or if it is for other reasons, just please be aware not to sell more than £15K in a day, this would include cumulative smaller amounts across your ISA/SIPP/share accounts. I did suggest to HL they may like to bring this to clients attention, as a 3% loss for the sake of splitting the sale over more than one day is an expensive mistake

From SUPPLEMENTARY INFORMATION DOCUMENT (SID) on Marlborough website, which also gives details of current cancellation and normal prices:

Cancellation Price – Dual Priced Funds

In a dual priced fund where an investor
sells over £15,000 in value of their units,
either singly or as a combination of
smaller deals for the same valuation
point, we may sell those units at
‘cancellation price’. This is the lowest
price calculated for a dual priced fund
and is based on the selling price of
all the stocks and shares within the
fund. This action is used to protect the
remaining investors within the fund as
we may have to sell some of the fund’s
own investments in order to raise the
money to pay the proceeds of a large
deal.

Unfortunately its not as simple as that, because from Malborough's point of view HL is a single 'investor' so all it requires is for HL to have a net £15,000 sale (or more) on any given trading day and it will swing down to the cancellation price.


HL are considered a single 'investor' because they have one custodian account with them to hold all the units, and then on HL's platform the units are divided up across clients on the HL platform.