Managed Funds Control of the buy-in date

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

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  1. pinkeye

    pinkeye Active Member

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    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
     
    pinkeye, 12th Nov, 2007
    #1
  2. Simon Hampel

    Simon Hampel Founder Staff Member

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    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.
     
    Simon Hampel, 12th Nov, 2007
    #2
  3. Rob G

    Rob G Well-Known Member

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    What does it say in your contract ?

    (You did read the small print of course)

    Cheers,

    Rob
     
    Rob G, 12th Nov, 2007
    #3
  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.
     
    crc_error, 12th Nov, 2007
    #4
  5. pinkeye

    pinkeye Active Member

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    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.
     
    pinkeye, 12th Nov, 2007
    #5