How daily traded funds work
A daily traded fund is often actively managed, and trades once per day. This type of fund can consist of different types of assets, such as stocks, interest rate instruments, and commodities.
Below is a description of how the daily fund routine typically works.
The Daily Traded Fund Routine
There are three high-level steps in the routine as described below.
Step 1 - Placing an order:
The investor places the fund order on each platform.
Step 2 - Cut-off time:
Daily traded funds are traded once a day. The different platforms collect all customers' orders until the platform's break time (often 13:00 CET) and then send a buy/sell order to the fund company.
For orders placed before the cut-off time, fund shares are bought/sold at the share price set in the morning the next day (usually around 11:00 CET) based on the order day's closing prices from all markets (the US as the last market).
Step 3 - Update of NAV:
The NAV courses are normally published 2-3 hours later (around 13:00-14:00 CET) by the platforms. The latest NAV is published earlier on auagfunds.com, you can find it on the top of each fund page here:
The process for buying/selling fund shares always follows the routine described above, and the buy/sell price can be seen in your depository's transaction note. If there is a delay regarding when the fund shares are visible on the platform, it does not affect the order itself.
The fund is closed for trading (buying/selling by investors) on Saturdays, Sundays and Swedish/American holidays. In these cases, the publication of the NAV will be the next working day. On days when the fund is closed for trading due to a Swedish holiday - but where the American stock exchange is open - the forthcoming NAV settlement will reflect two days of movement on the American stock exchange.
Note that funds that set the NAV for "the same day", which looks fast, do not use the actual closing prices. They have a cut-off time mid-day and use parts of the price movements from the previous day.