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Forward pricing

Forward Pricing

Mutual funds are traded on a forward pricing basis, meaning the price you see will be different to the price you may trade at.

Mutual funds are traded on a forward pricing basis, meaning the price you see will be different to the price you may trade at.

This is because funds are priced once per day, manually by the fund manager. So the price of the fund won’t be known until after all the instructions to buy and sell have been collected, sent to the fund manager, and processed the next day.

Forward pricing is based on the fund’s net asset valuation (NAV).

The buy and sell prices of mutual funds are generally not the same. Mutual funds use a dual pricing system where the buy price is typically higher than the sell price, reflecting the costs associated with creating or canceling fund units.

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Time-Weighted Rate of Return (TWRR)

A return calculated over the time period invested, that excludes extraneous elements, such as deposits to and withdrawals from the investment accounted.

Diversification

An investment strategy in which money is put into a variety assets.

Key Information Document (KID)

A document issued by an investment fund to help investors determine if it's the right fund for them.

SPAC

Find our what a SPAc or special purpose acquisition company is.

Year to Date (YTD)

A period of time that starts with the first day of the current calendar year and ends with today.

Holding Period Return

The amount of money generated by an asset during the time that it was held by an investor..

Interest Rate

The amount a lender charges for lending your money, or a borrower pays you for borrowing your money.

W-8BEN Form

Non-US individuals and businesses may have to file this form for the Internal Revenue Service (IRS), the US tax authority.

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