Pension funds... bid-offer spread...

gm0

For my occupational.  All single pricing.  Can only endorse the above and add a single pricing example that I double checked with index data.  Below.  One of my retail pension drawdown platforms has dual pricing for some funds. 

I did a reconciliation on published index total return data (web sourced) for FTSE UK All Share TR and the fund manager published single daily prices for an inside a pension UK FTSE All Share passive tracker fund that I formerly used.  The positive expectation being that this would deliver the index return less the small declared fee.  And the healthy suspicion being that there was a possibility of more going on inside the unit price and so  it was worth looking into to see what was what.

Result was this.  The realisable cash from the sale of N units at daily price X value properly tracked the growth of the  FTSE All Share TR index data *exactly* bar the declared fund management cost across a 5 year data series.  In that case the shortfall vs the pure index was the  declared fee drag of 0.04%.

There was a very small amount of tracking error a lot less than the fund spec allows. which averaged out over time to near 0.

There did not on this occasion appear to be any other "hidden" undeclared charges buried in the unit price or as per the query via a spread/swing/trading cost stock lending income/FX etc.

Speculatively this result may well be in part because that this pension fund (and many others like it) in major FM houses but sold to occupational trusts are "facade" funds or pension specials not investible retail anyway and not actually a standalone pool of assets worked alone.  And therefore not on trustnet with the right cost structure etc.).   Asset structure, flows and taxes for the aggregate LGIM position being rather different to the pension special which has monthly net inflows which are quite stable. And a relatively low level of fund switching and retiree activity.