What is 'forward pricing'? Definition & meaning

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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Fundamentals

The data or information that is likely to impact a company's stock price.

Arithmetic Mean

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Ponzi Scheme

A form of fraud designed to lure new investors, and pays the earlier backers by using the new investors' money.

Coupon

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Accounting standards

The rules a company follows when preparing financial statements.

Investment Return

The amount of money made or lost from an investment. Usually expressed as a percentage.

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Forward Pricing