OEIC unit fractions

aroominyork

I’m interested in the fractions in which OEIC units trade. As an example using a couple of bond funds I own, Man GLG Sterling Corporate Bond (Prof C, Acc) trades today at £12.280p and sells units in one-thousands, so you can buy or sell to about the nearest penny.  Vanguard Global Bond Index (Acc) trades at £150.2445 but only sells one-hundreds of a unit. On Monday I placed a buy order for £1327.50 of Vanguard and was sold 8.85 units at exactly £150.00 each (8.85 * 150.00 = £1327.50). The reported trading price was £150.0564, so I was gifted an extra 50p worth of units. If they traded in greater fractions I would have been sold 8.8467 units. Why do companies – especially those with unit OEICs at quite high units cost – not trade in greater fractions to be more accurate?

EdSwippet

aroominyork said:

... Why do companies – especially those with unit OEICs at quite high units cost – not trade in greater fractions to be more accurate?

Or -- which is really just asking the same question a different way -- why do some companies launch OEICs with an initial price that is higher than appears sensible?

The fund you mention launched in 2009 at £100/unit. Choosing a round number seems natural enough, but £10/unit or even £1/unit would have been just as usable. Arguably more so, as Vanguard might then price in fewer decimal places.

No answer to your question, by the way. Not even a guess. Like you, I'd be interested in a logical explanation. (My suspicion is "marketing". A non-mathematical investor might associate a higher unit price with better past performance.)