When are the value of unit trusts/funds calculated?

Question

One day last week all the major markets went up in value and yet virtually ALL of funds went down. Today, virtually all funds went up significantly and yet many markets went down. I accept that each market is made up of individual share and event when the market as a whole goes up some individual share go down. However, I cannot accept that virtually all funds go down when each market individually goes up. Are funds calculated in accordance with the prices of the shares they hold close that day?

Answer 1

The bid price of units held are calculated as at 12pm close of business on each working day. If you phoned a provider for a valuation on your funds, they would give you the value as at 12pm on friday. Hope this helps

Answer 2

I have a pension fund, which I can see online at any time. It changes daily and is correct for the day.

The probability is that what you are seeing is the difference between "informed investor" and the marlets in general. In other words - a GOOD trust fund manager will have worked out (for example) if interest rates will go up or down well ahead of the market. that's why you employ professionals.

If they are lagging, then you are with the wrong fund.

To check, plot your fund value daily against the Market share index (ftse, Nasdaq, whatever you use). It will only tale a few weeks to know if your guys are leaders or followers.

Answer 3

When you are comparing "major markets" make sure that you compare apples with apples. The whole idea behind so many unit trusts are that each manager believes he will outperform the market. Therefor you will never have a 1to1 relationship. But there should be some correlation - that's why I think you are not comparing apples with apples, and making generalisations. An absolute no-no in investing.

Answer 4

After the market closes around 4:00 pm ET.