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Control of the buy-in date

Discussion in 'Managed Funds & Index Funds' started by pinkeye, 12th Nov, 2007.

  1. pinkeye

    pinkeye Active Member

    Joined:
    30th Oct, 2007
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    Location:
    Melbourne, VIC
    Hi InvestEd,

    When I send an application with a cheque to buy in to a fund, it will take one day for the application to travel in the post, and then two or three days for the cheque to clear.

    Do I assume correctly that I will be bought in to the fund on the day the cheque clears (as opposed to the day the application is received)? i.e. I am effectively acting on minimum 3-day old information?

    Thank you
     
  2. Simon Hampel

    Simon Hampel Co-founder Staff Member

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    Location:
    Sydney, Australia
    Don't forget that the new unit prices we see today (updated this afternoon) are from the previous day's trade ... so you are actually dealing with information that's even older :eek:

    This is why timing into managed funds is basically impossible ... especially for a high volatility fund which could rise or fall 10%+ over the course of a week!

    The only way to deal with it is to either jump in head first with a long term view and ignore the short term ... or else to dollar-cost-average your way in over several investments.
     
  3. Rob G.

    Rob G. Well-Known Member

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    Location:
    Melbourne, VIC
    What does it say in your contract ?

    (You did read the small print of course)

    Cheers,

    Rob
     
  4. crc_error

    crc_error The Rule of 72

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    usually it should be the price on which they recieve your application.. at least that was the case when I setup colonial and platimum funds.
     
  5. pinkeye

    pinkeye Active Member

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    30th Oct, 2007
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    Location:
    Melbourne, VIC
    I must have missed this reading the prospectus, I will check it out tonight.

    However, as Sim has reminded me, even if it is the date of application, this is still relying on days-old information, making it difficult/impossible to accurately time entry to a volatile fund. Dollar cost averaging and long term investment required.