Unit price

20122013

About changing funds, please excuse my non- technical terms..

If I have 20 different funds on a platform and asked the platform to change (sell) these 10 funds and 'buy' '1 new fund'.. what would this process be called:

1. re-registration

2. selling and buying 

3. switched

4. or something else?

And will I get just one unit price for this '1 new fund'? as I had though they will be buying this new fund as each unit had been 'sold/ switched' but it seems I got 1 unit price.  

eskbanker

To me that process is simply selling and buying, although I believe that in some circumstances it may be possible to handle it as a switch, depending on platform, fund managers, etc, involved.

The fact that you've sold previously has no impact on the unit price of your purchase(s), so any buy that you make will involve a single unit price for that new fund, i.e. if you sell n units of the old fund and receive £x, you're buying £x worth of the new fund regardless of what its unit price is, not the same n units of it.

dunstonh

If I have 20 different funds on a platform and asked the platform to change (sell) these 10 funds and 'buy' '1 new fund'.. what would this process be called:

If its a joined up transaction, its a fund switch.  If its not joined up, then its a sell and buy.

And will I get just one unit price for this '1 new fund'?

Possibly. Possibly not.  it would depend on the settlement period of each of the funds being sold and whether the platform supports pre-funding or not (most DIY platforms do not).

T+2 is the most common settlement period.   So, if all the funds were T+2, then the funds for the purchase will be available at the same time.

20122013

dunstonh said:

If I have 20 different funds on a platform and asked the platform to change (sell) these 10 funds and 'buy' '1 new fund'.. what would this process be called:

If its a joined up transaction, its a fund switch.  If its not joined up, then its a sell and buy.

Would you mind explaining in simplier terms for me ? 

As I think what I did was selling down all the funds and then buying one new fund.

And will I get just one unit price for this '1 new fund'?

Possibly. Possibly not.  it would depend on the settlement period of each of the funds being sold and whether the platform supports pre-funding or not (most DIY platforms do not).

T+2 is the most common settlement period.   So, if all the funds were T+2, then the funds for the purchase will be available at the same time.

Would you mind explaining in simplier terms for me about, please ?

As I had 20  funds and was told by the provider which is not a DIY platform that instead of 'selling and buying'  or 'switching' one fund at a time, it will be more straight forward to do it in one transaction. .  

The way I understand is that as the 20 funds I had, they all have one price point / day, albeit at different times.

I would like to know when will the new fund be purchased? ie will my provider wait for all 20 funds be sold then purchase the new fund (so I will have one unit price )? or as soon as each fund was sold then purchase the new fund? (ie more than one unit price depending on what date they were bought)?