Valuation Point? 8 April 2020 at 3:53PM in Savings & Investments 19 replies 388 views

Bruckner

Looking at Key Facts documents on the following and cannot find the daily valuation point time or cut-off point for this fund:

Legal & General International Index Trust I Class (LGII) - GB00B2Q6HX78

L&G website isn't very helpful, it lists all its funds and says "Prices are normally calculated at noon or 3.00pm each business day and will vary" and there is no mention of cut-off or valuation point in the key facts docs.
Does anyone know the dealing cut-off time and valuation point?
Thanks!

Thrugelmir

Valuation point will be after the underlying markets invested in have closed. 
Takes a few hours of adminstrative work to correctly value the fund the following day. Their aim would be to achieve this by 12 noon on the next working day. The 3 hour window simply provides a backstop. 
As for dealing cut-off give them a call. 

port_of_spain

The valuation point is 15:00 according to https://www.hl.co.uk/funds/fund-discounts,-prices--and--factsheets/search-results/l/legal-and-general-international-index-trust-c-income (That's a different Class unit, but different classes of the same fund will have the same valuation point.)

Thrugelmir said:

Valuation point will be after the underlying markets invested in have closed. 
Takes a few hours of adminstrative work to correctly value the fund the following day. Their aim would be to achieve this by 12 noon on the next working day. The 3 hour window simply provides a backstop. 
As for dealing cut-off give them a call. 

Slightly puzzling comments. With 15:00 as a valuation point, that is during when most of the underlying markets (North American and European) are open. I can't imagine they will price units based on the closing prices of the markets on the previous day.

Bruckner

Something else puzzling. iWeb say their dealing cut-off time is 45 minutes before the fund valuation point
https://www.iweb-sharedealing.co.uk/PDFs/OrderExecutionPolicy.pdf
How can this be? For most funds the dealing cut-off is several hours before the valution point. So ho can iWeb place orders at the next valuation up to just 45 minutes before?

This is significant because with most index tracker funds in the last couple of weeks you have no idea what level the market will be at between placing your order and up to a day until the next valuation point.

ColdIron

The L&G Factsheet (as opposed to the KIID) states the following

DEALING INFORMATION
Valuation frequency Daily, 3pm (UK time)
Dealing frequency Daily
Settlement period T+4

https://literature-lgim.huguenots.co.uk/srp/documents/?type=FS&ISIN=GB00B2Q6HV54

Albermarle

How can this be? For most funds the dealing cut-off is several hours before the valution point. So ho can iWeb place orders at the next valuation up to just 45 minutes before?

That seems strange . From previous posts if you want the next valuation point for a Vanguard fund ( 21.00) the cut off point is 09.00 ( on their own site ) latest 10.00 on some other platforms. Yet Iweb seems to be saying the cut off point is 20.15??

port_of_spain

Well, IWeb can't do magic. If it's a cut-off time for orders set by the fund manager, it will apply to IWeb, too.

I wouldn't be too concerned, anyway. Prices may move a few percent in a period of hours or a day, but they are as likely to move in investors' favour as against it, so best to be phlegmatic about it

dunstonh

The cut off time has to allow enough time for the administration and orders to be in place before the trade time.   So, there is often some margin built in

bowlhead99

Albermarle said:

How can this be? For most funds the dealing cut-off is several hours before the valution point. So ho can iWeb place orders at the next valuation up to just 45 minutes before?

That seems strange . From previous posts if you want the next valuation point for a Vanguard fund ( 21.00) the cut off point is 09.00 ( on their own site ) latest 10.00 on some other platforms. Yet Iweb seems to be saying the cut off point is 20.15??

IWeb does not seem to be saying the cut-off point for that fund is 20.15.  

They say as a general rule, the cut off is 45 minutes ahead of valuation. They are then pretty explicit that it varies by fund and you should check the valuation point and the cut-off point for things you actually want to deal in.  The purpose of that part of the order execution policy is merely to give you some sort of indication that funds must be ordered in advance of valuation cut off, which is all that's needed for the purpose of a policy document; anyone reading it should be in no doubt that they should check what the actual cut-off is, for the fund that they want to buy or sell.

Per link provided by Bruckner above:
"When you buy or sell units in a fund, we send the order to the fund manager for execution at the next valuation point. This is the fixed time of day when the fund is valued by the fund manager. It is often 12 noon, but does depend on the fund. Our cut-off time for placing orders is typically 45 minutes before the valuation point. You should check the valuation point and cut-off time for orders for the fund you want to trade first, to make sure you place your order in good time. If you miss that day's valuation point, we will carry over your order to the valuation point the next day."

Thrugelmir

port_of_spain said:

The valuation point is 15:00 according to https://www.hl.co.uk/funds/fund-discounts,-prices--and--factsheets/search-results/l/legal-and-general-international-index-trust-c-income (That's a different Class unit, but different classes of the same fund will have the same valuation point.)

Thrugelmir said:

Valuation point will be after the underlying markets invested in have closed. 
Takes a few hours of adminstrative work to correctly value the fund the following day. Their aim would be to achieve this by 12 noon on the next working day. The 3 hour window simply provides a backstop. 
As for dealing cut-off give them a call. 

Slightly puzzling comments. With 15:00 as a valuation point, that is during when most of the underlying markets (North American and European) are open. I can't imagine they will price units based on the closing prices of the markets on the previous day.

Has to be. US markets don't close to 21:00 GMT.  Pricing has to factor in, market value of investments, accrued dividends and interest income, purchases and redemptions of units in the fund, cash balances held (which will include currency accounts and therefore have exchange movement) and investment managers fees. 
Orders need to be placed early the previous day to ensure that the fund has sufficient liquidity (cash) to meet investor redemptions. Investment managers can then sell holdings during that days trading session.

port_of_spain

Thrugelmir said:

port_of_spain said:

The valuation point is 15:00 according to https://www.hl.co.uk/funds/fund-discounts,-prices--and--factsheets/search-results/l/legal-and-general-international-index-trust-c-income (That's a different Class unit, but different classes of the same fund will have the same valuation point.)

Thrugelmir said:

Valuation point will be after the underlying markets invested in have closed. 
Takes a few hours of adminstrative work to correctly value the fund the following day. Their aim would be to achieve this by 12 noon on the next working day. The 3 hour window simply provides a backstop. 
As for dealing cut-off give them a call. 

Slightly puzzling comments. With 15:00 as a valuation point, that is during when most of the underlying markets (North American and European) are open. I can't imagine they will price units based on the closing prices of the markets on the previous day.

Has to be. US markets don't close to 21:00 GMT.  Pricing has to factor in, market value of investments, accrued dividends and interest income, purchases and redemptions of units in the fund, cash balances held (which will include currency accounts and therefore have exchange movement) and investment managers fees. 
Orders need to be placed early the previous day to ensure that the fund has sufficient liquidity (cash) to meet investor redemptions. Investment managers can then sell holdings during that days trading session.

At the market close isn't the only possible time to deal, though I understand a large volume of dealing does happen at that time. And a global fund is unlikely to do all its trading at market close, when it covers markets with a wide variety of closing times.

Your theory is that this fund, with a pricing point of 15:00, actually uses prices from 21:00 on the previous day (which is the time that US markets, which include more than 50%, but not all, of the fund's assets, close). And that the cut-off point for dealing must therefore be long before 21:00 on the previous day to the valuation point. It's a consistent theory, but I'd be very surprised if it's true.

If the fund was going to actually value the assets at 21:00, I'd expect them to say the valuation is 21:00. Though naturally there would be some delay after 21:00 before the prices were calculated and published.

When do you think the many funds with valuation points of 12:00 actually value their assets? The previous day, too? I'd be very surprised, again, if that's the case.