Unit Pricing

house_help

I have 2 x JISA with Fidelity for my kids. Last week I ordered within both accounts few minutes of each other £198 of Vanguard Global Small-Cap INDEX ACC.


The confirmation in both accounts shows the same bought and settlement date and the same unit price of £300.9181 however one account that bought 0.65 units and the other 0.66


This leaves ~ £3 less or 1.5% in the one account than the other. Is this usual / expected? The rounded units expected would be 0.658


Lesson learned for me is to state the units want to buy rather than a £ amount.

bowlhead99

If the unit price was 300.9181 and each of them spent £198 buying units, they should both get 0.658 units as you say. Typically the fractional shares would be allocated to more than two decimal places .

How many shares were actually showing as bought per the contract note? Are you saying the contract notes literally show one of the purchases buying fewer fractional units for the same amount of cash, and that account doesn't have any extra left-over cash on the account?

Could it just be that the contract note shows the correct 0.658 shares bought and the page reporting your holdings is only displaying them to two, and for some reason has rounded one down for display instead of up, then done a simple multiplication on rounded units times current price to give the value?

As a side note, the problem with stating the units you want to buy is that when you reach the cut-off time for placing an order you don't know what the price is going to be, because you haven't reached the valuation point and the accountants and fund administrators haven't done their workings to see what the asset value is. So if you had £200 in the account and wanted to leave £2 in the account for expenses and thought you would order 0.66 shares, you would have to hope the share price didn't go over £300 otherwise you would be short of cash / not leave as much in the account as you hoped, which would be a pain to manage.

house_help

The confirmation of transaction shows one buying 0.65 and the other 0.66. Hopefully below images from both. There is a value difference of about £3 in the accounts now after both have settle. They have the same excess cash left so £198 was taken from both. I have sent them a message online, see what they say.

house_help

Their online response:


This is because of difference in units bought in these accounts due to the rounding off of units in the funds. Our Client Terms state:

"There may be instances (e.g. Re-registration or post-trade allocations) where your holdings in Investments are rounded down to two or more decimal places. Any rounding may result in a small, unrecoverable loss to your holding (always less than 0.01 of a unit of the relevant Investment)."


They point to the fact that in the same transaction I bought one other fund for both accounts also for £198 - for that fund the rounding of 0.01 has again happened but the other way around. i.e. the account that had 0.01 less of the Vanguard had 0.01 more of the other fund. However the other fund price per unit was £1.662 compared to the £300.9181 so in total value across the two funds (they only ones I bought) there is a delta of £2.99 or 0.76% between the two accounts from exact same purchase values at the same time.