Same funds, different results on 2 platforms

cattie

I hold a range of funds on 2 different platforms, iweb & fidelity. On each platform I've invested in 2 of the same funds. One being Ballie Gifford American B Nav Acc, the other HSBC Global Strategy Balanced Acc. What I'm finding confusing is that whilst on iweb both funds show a profit, on Fidelity they both show a loss, albeit small. I'm just wondering if there could be a reason for this? Are they perhaps valued at different times of the day, though both funds show the same price for buying?

underground99

There is one daily price but the time it takes to reach the providers and be updated online may differ, so one might be using a stale price. For BG, both websites have the latest available price as being the 1,861.00 GBX for yesterday 11 March; both show that price to be a fall of 0.69% from the previous day and both show the fund to be up 114.48% over the year. 

If you are showing a different performance it is likely to be: 

a) one provider is not using the 1861p per share times your units to give you the valuation, but is using a different day's price instead because they have updated the factsheet for the latest figure but not the data feed for the holdings summary, or vice versa.

b) The units you hold were not purchased at the exact same mix of prices on the two platforms; for example  on platform A you bought £1000 in December and £500 in January, but on platform B you bought £1000 in December and £2000 in January.  Overall you have twice as much on platform B as on A, but the average cost will be different because one had a relatively small amount on a cheap day and a relatively large amount on an expensive day, and vice versa.

c) one provider has handled the notional dividend distributions within the ACC fund differently and deducted an internal 'equalisation' payment off the original cash cost, or added an internal 'income' allocation on to the original cash cost, o give you a different base cost for CGT calculations because they think that might be useful to you.

cattie

Ah, I think b) in your very comprehensive reply is probably the reason & something I hadn't given consideration to.
Thank you so much!

ANGLICANPAT

Does a provider using  what you called 'stale ' prices, happen very often?     What if you do a 20k or more  order to buy ,in  plenty of time before the cut off at noon   , and youre pleased to see the noon pricing turned out to be a massive drop ----but the new pricing doesnt get picked up by your provider  till after he's  done your transaction ? Is it just hard cheese  , or do you have cause for complaint?

Linton

The price is determined by the fund manager, not the platform. What the platform says the price is does not matter.

Grenage

My fidelity app is often quite out on values; it was out by 5% last week.  It eventually catches up, but their figures can be a bit weird.

underground99

ANGLICANPAT said:

Does a provider using  what you called 'stale ' prices, happen very often?     What if you do a 20k or more  order to buy ,in  plenty of time before the cut off at noon   , and youre pleased to see the noon pricing turned out to be a massive drop ----but the new pricing doesnt get picked up by your provider  till after he's  done your transaction ? Is it just hard cheese  , or do you have cause for complaint?

I was meaning that the price they are displaying on their site for the last valuation point is a little out of date because there was a more recent valuation point and they were waiting for the data.  It has absolutely no bearing on what you will pay to subscribe to a fund or what you will receive when you redeem out of a fund.  Your platform provider can't accidentally process your subscription or redemption request using bad information to get you in or out of the fund at an old or out of date price, because your platform provider is only an intermediary. The fund manager is the one who authorises people to be let in or out of the fund and at what price (the price calculated for that valuation point). 

When you place a fund order before your platform's cut off time for them to be able to transmit it to the fund manager's administrator before the fund's cut-off time, the information sent by your provider to the fund administrator is either the cash value you would like to subscribe or redeem, or the quantity of units you would like to redeem, depending how you gave your order to the provider.  The administrator receives it and adds it to their big list of subscription or redemption requests.  Once all the fund administrator's accountants have done their work, they finalise the price to be used for subscriptions and redemptions and this is what will be used for your order. In due course, a confirmation will be produced showing how many units you received or had redeemed for your money, or how much money you got for your units if you asked to sell a particular number of units, and the cash coming in or out will be settled between the fund and your platform provider.

As a separate workstream, the administrator, at some point after the accountants have calculated the price, will publish the price and make it available via market information services. The fund manager will update their own website. The various platforms will update theirs. You are free to go and look at the prices anywhere on the internet that you like, and some places will make the information available before others. It may be that your particular platform is slow to receive the data and make it available on the different parts of their website (investors' account portfolio summaries, fund summary factsheets, etc). The process might take a while.

But being slow to update a website will not result in you receiving the wrong number of shares or the wrong value of investment proceeds for the order that was transmitted to the fund manager in time for the (e.g. noon) cut-off to be accepted by the fund at the next valuation point.  So there is nothing to complain about. 

ANGLICANPAT

underground99  Thank you I really appreciate you taking the time to explain the way it works .