Creating a New Price for instruments that deals in amount
For normal unitised instruments the price provided by the fund manager will be used to confirm units bought or sold. For instruments where we unitise the instrument by creating our own price there is a system price calculator to do this. These instrument only deal in AMOUNT (a setting on the instrument)
Formula for interim confirmation price (Create new price button): “New market value immediately after buys (or sells or switch) at the fund manager PLUS all Sells between the previous month end price and the new price date (including the one you are confirming since it is showing on the fund manager statement) MINUS Buys between the previous month end price and the new price date (including the one you are confirming)” DIVIDED BY Previous month end market value calculated by the system (units balance x price) TIMES Previous month end price.
The first bit puts the current market value relative to the previous market value. i.e it must cancel out any sells and buys done between the previous month end price and the new price date
Example:
Previous month end market value: R100
Previous month end price: R1
New market value: R160
Buys done: R50
New price: (160 – 50) / 100 * 1 = R1.10
Growth: 110 – 100 = R10
Important: The Sells and Buys listed by the system will be added and deducted. Make sure the Sells and Buys listed by the system are on the fund manager statement. If they are not, you would need to manually compensate by adjusting the new market value of the fund manager. (deduct the sells and add buys listed on the system but NOT on the fund manager statement to the new market value before typing it in the input field). It is therefore important to use a statement from the fund manager that shows all the transactions between the previous price and the new price.
Month end price formula: New Market value DIVIDED BY system units
Last Updated on 7 years ago by Antoinette Van Meyeren