Prices when buying Funds on a Saturday

Audaxer

I was about to purchase a VLS fund online this morning and as the platform website has the fund price published as at close of play Friday, I assumed when I made the online purchase that would be the price. However I phoned up to check (with Halifax Share Dealing) as was advised that if I traded today, the Fund Manager would set the price at around mid-day on Monday - so I wouldn't know the price I had purchased at until Monday morning.

Is this definitely correct as I was fairly sure that I would be able to purchase at the online price set on Friday night, which I think was just updated on their website this morning from Thursday's closing price?

george4064

All unit trusts work on a forward pricing basis, so you never know the exact proce you are going to trade at. To facilitate this forward pricing basis mechanism, most platforms use a deadline to get client instructions in to get the next available valuation point.

For example, some platforms have a deadline at 5pm on the previous working day to get the next midday valuation point (which will be on a working day).

With Halifax, I would imagine if you were to place an instruction now it would get Monday's valuation point and you will know the price (plus receive your contract note) on Monday afternoon or Tuesday.

[Deleted User]

Hi,

yes most prices for dealing, buy or sell are set at midday on trading days.

Though if you place an order after midday on a Monday it will be priced at the Tuesday midday price.

If you're lucky the market will drop 100 points on Monday morning, so you will be able to buy cheaper, get more units for your money.

Audaxer

george4064 wrote: »

All unit trusts work on a forward pricing basis, so you never know the exact proce you are going to trade at. To facilitate this forward pricing basis mechanism, most platforms use a deadline to get client instructions in to get the next available valuation point.

For example, some platforms have a deadline at 5pm on the previous working day to get the next midday valuation point (which will be on a working day).

With Halifax, I would imagine if you were to place an instruction now it would get Monday's valuation point and you will know the price (plus receive your contract note) on Monday afternoon or Tuesday.

Thanks. I had previously been told during the week that if I placed my order for the VLS fund before 9:15am the next day, that is the price I would get, so I assumed that if I place my order before 9:15am on Monday, I would get Friday's price, but it seems not.

I would have thought that there was at least some time period where you could deal at the price you see online, but from what you are saying that doesn't seem to be the case.

[Deleted User]

Hi,

not with trusts, you can deal live with shares though.

From HL:

How are funds priced?

Funds are priced based on the value of their underlying holdings. Most funds will calculate and publish a price every working day. There is no continuous pricing of fund units throughout the trading day.


The vast majority of funds price each working day at noon. The pricing system means that when you place a deal it will be traded at the next available valuation point, typically noon the next working day. This means that you will not know the exact price that you will buy or sell at when you place the deal.


To check when your funds value please see the valuation point on the key features tab of the fund's factsheet.

ColdIron

It doesn't make much difference but it's probably worth pointing out that the valuation point of Vanguard's LifeStrategy is 21:00

[Deleted User]

Hi,

ColdIron wrote: »

It doesn't make much difference but it's probably worth pointing out that the valuation point of Vanguard's LifeStrategy is 21:00

is that when they update prices on their website, using the midday prices?

ColdIron

It's the (London) time stated in the Vanguard LifeStrategy prospectus

Audaxer

ColdIron wrote: »

It doesn't make much difference but it's probably worth pointing out that the valuation point of Vanguard's LifeStrategy is 21:00

Thanks, so if I buy today I would only be able to work out how many units I have actually got for my investment once the new price is published after 9pm on Monday.

[Deleted User]

Hi,

yes, though you won't buy today, you will place an order to buy at next dealing price, Monday noon.

ColdIron

Audaxer wrote: »

Thanks, so if I buy today I would only be able to work out how many units I have actually got for my investment once the new price is published after 9pm on Monday.

I believe so but bear in mind that you can't place an order at 20:59 and expect to get the 21:00 price. There is a 'cut off time' which for the VLS is 10:00, though this is probably the time that Vanguard receive the order and not necessarily your platform

‘Cut-Off Time’
the point on a Dealing Day prior to which a transaction must be received by the Administrator and Registrar in order to permit the transaction to receive that Dealing Day’s Valuation Point for each Fund as set out in Appendix 1;

If I'm honest I hold my investments for the long term so try not to get bogged down in this level of detail and just wait for the contract note. In 5 years time you won't even remember or notice the difference

You should have a look at the prospectus anyway

https://www.vanguard.co.uk/uk/portal/loadPDF?country=uk&docId=2077