Instruments that deal in amount only

This is used for instruments like PSP’s (Personal Share Portfolios) and instruments where there are additional costs at the fund manager that is not included in the price of the fund e.g commission and administration fees. These cost are thus factored into the market value of the fund and the fund manager deducts units or cash from the fund. If you don’t want to mirror these unit deductions or additions you can set the fund to deal in AMOUNT only.

On instrument there is a setting: Instrument deals in amounts. When this is selected the instructions to Fund Manager only happen in Amount and not in units. In short the system unitises the instrument. The units that the system keeps does NOT match the units at the Fund Manager. Only the market value matches.

Start with a price of R1 for the first investments in the system. From there you need to create your own price for the units before confirming each bulk instruction from the fund manager. Each new price is based on the previous month end price. At the end of a month you need to create a MONTH END price. This will now be used for future price calculations.

New Price Formula for Fund Manager Confirmations:
(New Market Value – Investments + Withdrawals) / Old Market Value * Old Price

Inputs to the New Price screen:

[star_list]

New Market Value Date: The transaction date on the fund manager statement of the units you are about to confirm
New Market Value: The market value AFTER the transaction you are about to confirm
Investments: All confirmed and unconfirmed INVESTMENTS between previous month end and New Market Value date
Withdrawals: All confirmed and unconfirmed WITHDRAWALS between previous month end and New Market Value date
Old Market Value: Previous month end market value. This will be the units on the system * the last price on the instrument in the previous month
Old Price: Last price on the instrument in the previous month

[/star_list]

Formula for Month end price: New Market Value / Units in the system.

The Month end price factors all variances created in the New price back into the price of the fund. It is important to create a Month end price every month only after you are sure you have confirmed all the units for the month. If there are any outstanding Bulk instructions at the fund manager, then don’t create the month end price until you are sure none of these are for a transaction date in the month you want to create a month end price for.

Also do not create any New Prices if you have not create a month end base price. If the unconfirmed bulk instruction is for the previous month do a New Price first and confirm the instruction, then do a month end. If the unconfirmed instruction is for the current month, do a Month End price first, then Create New Price, then confirm the instruction.

MENU STEPS FOR THE NEW PRICE CALCULATOR:

Select the Instrument for which a month-end price should be created -> Prices button -> New Price button
Enter the “New market value date” and the “New market value” amount.
Click the “Month End Price” button.

Last Updated on 5 years ago by Antoinette Van Meyeren