Currently prices are set once a day for funds (I believe), usually after close. ETF's change price throughout the day and are listed on exchanges so you can get real time pricing.
But you make a fair point, I'm sure it's possible, but doubt that many people who buy funds are day traders, in fact most probably hold for months if not years, so maybe the overall need isn't there?
If you want real time then currently don't trade in funds but trade yourself with individual shares or ETF's or Bitcoin!
I'm not a day trader either. However I do think that if I can buy something 4% cheaper if I stay alert and buy when the price is offered, that 4% is worth banking, no?
As far as I am aware, at no point in a given day can I go on the H-L platform or any other, ascertain the current price of a given fund, and then buy at that price. That is frankly an infringement of the basic law of contract.
If you look closely at the platform on which you trade there should be a clearly defined dealing schedule (daily, weekly etc) and valuation deadline (i.e 9am).
The price you will see quoted should be the previous days NAV meaning that by the time you place a buy order, the fund will have been revalued and you will see fluctuations to account for that day’s trading. If you do your research, like any investor should, this shouldn’t come as a surprise.
Example, if I login to a platform today (4th March) and check a fund that is priced daily, I will see the NAV of the fund at at close of business yesterday (3rd March). If I invest today (4th March at 10am) I will receive the price as at close of business on 4th March.
Ok, so I use Hargreaves Lansdowne and I believe that in this respect they operate like all the other platforms. This is what they have to say (my emphasis in bold)
The price is based on the net asset value (NAV) of the underlying holdings divided by the number of units or shares in issue. Dealing for both types of fund takes place on a forward-pricing basis, which means that a buy or sell instruction is placed at the next available valuation point. For this reason investors do not know the price they will pay or receive until after the deal is completed.
One thing they miss out in that explanation is that funds are valued at different times of day. For example, Fundsmith Equity is valued at 12.00 mid-day (presumably UK time, it does not clarify). So, four hours ago it was priced at 543.34. If I whack my order in now, why, technically, can I not get it that price? H-L and Fundsmith have all of 20 hours to execute the transaction. Far from "not doing my research" I have at least twice asked H-L to explain when a particular price actually applies to a particular transaction. The kindest description of their answer would be "opaque"
When I read people saying it's just not technically possible, I think of Michael Lewis book "Flash Boys". It describes among other things how in the USA people in remote country areas found cables being laid. When they enquired they were told that they were fibre-optic cables. Great, they thought, broadband coming here. Oh, no. They were being laid for the exclusive benefit of JP Morgan, to give them literally nano-seconds of trading advantage over competitors, as well as retail investors. I read that and thought of my H-L experiences... and this book was published in 2014, meaning it describes technical developments which are more than 8 years old.
More importantly than Prague's difficulties with real time buying, what on earth is going on with the Nasdaq?
Tech shares being sold off left, right and centre this last few days and my BG funds which are obviously heavy with them falling at an alarming rate.
Is this traders just coming into work and not feeling confident, so deciding to have a good old sell off, or is there something much bigger going on here which is going to take the Nasdaq back down to where it came from 6 months ago?
Currently prices are set once a day for funds (I believe), usually after close. ETF's change price throughout the day and are listed on exchanges so you can get real time pricing.
But you make a fair point, I'm sure it's possible, but doubt that many people who buy funds are day traders, in fact most probably hold for months if not years, so maybe the overall need isn't there?
If you want real time then currently don't trade in funds but trade yourself with individual shares or ETF's or Bitcoin!
I'm not a day trader either. However I do think that if I can buy something 4% cheaper if I stay alert and buy when the price is offered, that 4% is worth banking, no?
As far as I am aware, at no point in a given day can I go on the H-L platform or any other, ascertain the current price of a given fund, and then buy at that price. That is frankly an infringement of the basic law of contract.
If you look closely at the platform on which you trade there should be a clearly defined dealing schedule (daily, weekly etc) and valuation deadline (i.e 9am).
The price you will see quoted should be the previous days NAV meaning that by the time you place a buy order, the fund will have been revalued and you will see fluctuations to account for that day’s trading. If you do your research, like any investor should, this shouldn’t come as a surprise.
Example, if I login to a platform today (4th March) and check a fund that is priced daily, I will see the NAV of the fund at at close of business yesterday (3rd March). If I invest today (4th March at 10am) I will receive the price as at close of business on 4th March.
Ok, so I use Hargreaves Lansdowne and I believe that in this respect they operate like all the other platforms. This is what they have to say (my emphasis in bold)
The price is based on the net asset value (NAV) of the underlying holdings divided by the number of units or shares in issue. Dealing for both types of fund takes place on a forward-pricing basis, which means that a buy or sell instruction is placed at the next available valuation point. For this reason investors do not know the price they will pay or receive until after the deal is completed.
One thing they miss out in that explanation is that funds are valued at different times of day. For example, Fundsmith Equity is valued at 12.00 mid-day (presumably UK time, it does not clarify). So, four hours ago it was priced at 543.34. If I whack my order in now, why, technically, can I not get it that price? H-L and Fundsmith have all of 20 hours to execute the transaction. Far from "not doing my research" I have at least twice asked H-L to explain when a particular price actually applies to a particular transaction. The kindest description of their answer would be "opaque"
When I read people saying it's just not technically possible, I think of Michael Lewis book "Flash Boys". It describes among other things how in the USA people in remote country areas found cables being laid. When they enquired they were told that they were fibre-optic cables. Great, they thought, broadband coming here. Oh, no. They were being laid for the exclusive benefit of JP Morgan, to give them literally nano-seconds of trading advantage over competitors, as well as retail investors. I read that and thought of my H-L experiences... and this book was published in 2014, meaning it describes technical developments which are more than 8 years old.
Truly, we are mug punters.
Sorry Prague but you're still not getting it. No, if you dealt today at 4pm you'll get the price calculated at noon tomorrow. That's forward pricing. No idea why Fundsmith would be valued at midday, but if it's the global fund you are talking about maybe they want to get the closing values of the Asian markets as well as the US.
Markets on the way to recovering all the losses that people were fretting about on here a week ago.
And to underline the point I made last week, that fund-based mug punters can't play the market short term even if they want to, here is an example. On the 22Feb I tried to "buy the dip" with some Baillie Gifford Europe, on the H-L platform. I now find that according to the graph, I bought and then it immediately lost 4% of value the next day. WTAF?
Now, can anyone give me any example of another huge retail market where it is perfectly legal to sell the goods to punters and not be able to tell them, in advance, the price you will pay for those goods????
And can anyone give me a good reason why these unit trust funds cannot be priced and traded live in real time, when ETFs apparently can? I mean, I understand that it might be relatively complicated and expensive to make the necessary changes, but I don't think that's a good reason. It's just a convenience for the loaded, skillfully lobbying industry, allowing them to fleece mug punters. Just as for many years they fleeced us with their ridiculous, and as it turns out, entirely unnecessary 5% bid-offer spread pricing.
There, I feel better now
Might have been this morning, but the FTSE is now only 0.3% up on the day & has fallen back slowly sine lunchtime.
That might be a good reason why you should not attempt to trade in "real time" as markets move up & down at a whim and you could easily be caught trading the wrong way.
Nah, sorry, that's not it. I bought that tranche of Baillie Gifford Europe, after I saw the big dive in markets, and decided that big dive was overdone, so I could therefore pick up a "bargain", i.e that fund at 4% less than it had been the day before, for what I judged to be no good long term reason. Turns out that the price I paid was the price before the dive took place. That is just fucked up, sorry for my language. As you know I'm not a day trader, nothing near it, but I try to pick my moments to buy (Less good at the sell bit), and I cannot do that effectively.
Or let me put it another way. Millionsof mug punters now go on price comparison sites for every little thing they buy, and end up buying it from Amazon to save 4% on £20, helping along the process of putting many decent retailers out of business. Yet being stitched up over 4% on £2,000 or more, is just something we should accept?
BUT, you are comparing apples with pears.
You know the funds aren't priced in real time/same day, also unless you went through every stock in the holding the fund may not have gone down in value to the extent you thought anyway, or they may have sold some before the drop etc etc.
I agree with you in part that the way funds are valued doesn't lend itself to doing what you want to do, but you know that so you know you can't rely on an it dropping or increasing based on something entirely different.
If you want to trade real time or near as damn it, ETF's or individual shares.
As I've said many times on here, @pragueaddick, the lack of real time pricing is one of the key reasons I don't invest in unit trusts.
Add in potential liquidity issues due to the open-ended structure, opaque charges, and all sorts of other ways of skimming off your capital and destroy value that is going on underneath and it's a poor product, in my opinion. Mug punters are kept 'happy' with their 7% return but have no sight of what they should have earned - and that's before you take into account that so many underperform.
Then the platforms have the check to charge on a 'assets under management' basis!
As for the technical reason they don't price in real time, it is to do with the fact that they are set up as a trust structure and how they then deal with redemptions and subscriptions overnight. The new ETFs that are not swaps based and invest directly, manage the same process during the day. But they are open to the same redemption and liquidity issues but they can manage them intra-day.
This evening, the FED has given an inflation warning. Hold on to your hats. Now that the US markets are crashing, you will see some very interesting outcomes in the cannabis and crypto EFTs, I think, as all that momentum gets unwound and they start to try to manage intra-data redemptions ....
Markets on the way to recovering all the losses that people were fretting about on here a week ago.
And to underline the point I made last week, that fund-based mug punters can't play the market short term even if they want to, here is an example. On the 22Feb I tried to "buy the dip" with some Baillie Gifford Europe, on the H-L platform. I now find that according to the graph, I bought and then it immediately lost 4% of value the next day. WTAF?
Now, can anyone give me any example of another huge retail market where it is perfectly legal to sell the goods to punters and not be able to tell them, in advance, the price you will pay for those goods????
And can anyone give me a good reason why these unit trust funds cannot be priced and traded live in real time, when ETFs apparently can? I mean, I understand that it might be relatively complicated and expensive to make the necessary changes, but I don't think that's a good reason. It's just a convenience for the loaded, skillfully lobbying industry, allowing them to fleece mug punters. Just as for many years they fleeced us with their ridiculous, and as it turns out, entirely unnecessary 5% bid-offer spread pricing.
There, I feel better now
Might have been this morning, but the FTSE is now only 0.3% up on the day & has fallen back slowly sine lunchtime.
That might be a good reason why you should not attempt to trade in "real time" as markets move up & down at a whim and you could easily be caught trading the wrong way.
Nah, sorry, that's not it. I bought that tranche of Baillie Gifford Europe, after I saw the big dive in markets, and decided that big dive was overdone, so I could therefore pick up a "bargain", i.e that fund at 4% less than it had been the day before, for what I judged to be no good long term reason. Turns out that the price I paid was the price before the dive took place. That is just fucked up, sorry for my language. As you know I'm not a day trader, nothing near it, but I try to pick my moments to buy (Less good at the sell bit), and I cannot do that effectively.
Or let me put it another way. Millionsof mug punters now go on price comparison sites for every little thing they buy, and end up buying it from Amazon to save 4% on £20, helping along the process of putting many decent retailers out of business. Yet being stitched up over 4% on £2,000 or more, is just something we should accept?
BUT, you are comparing apples with pears.
You know the funds aren't priced in real time/same day, also unless you went through every stock in the holding the fund may not have gone down in value to the extent you thought anyway, or they may have sold some before the drop etc etc.
I agree with you in part that the way funds are valued doesn't lend itself to doing what you want to do, but you know that so you know you can't rely on an it dropping or increasing based on something entirely different.
If you want to trade real time or near as damn it, ETF's or individual shares.
As I've said many times on here, @pragueaddick, the lack of real time pricing is one of the key reasons I don't invest in unit trusts.
Add in potential liquidity issues due to the open-ended structure, opaque charges, and all sorts of other ways of skimming off your capital and destroy value that is going on underneath and it's a poor product, in my opinion. Mug punters are kept 'happy' with their 7% return but have no sight of what they should have earned - and that's before you take into account that so many underperform.
Then the platforms have the check to charge on a 'assets under management' basis!
As for the technical reason they don't price in real time, it is to do with the fact that they are set up as a trust structure and how they then deal with redemptions and subscriptions overnight. The new ETFs that are not swaps based and invest directly, manage the same process during the day. But they are open to the same redemption and liquidity issues but they can manage them intra-day.
This evening, the FED has given an inflation warning. Hold on to your hats. Now that the US markets are crashing, you will see some very interesting outcomes in the cannabis and crypto EFTs, I think, as all that momentum gets unwound and they start to try to manage intra-data redemptions ....
Helpful insight.
The markets are a bit choppy, I'm in and out of Etoro every 5 minutes, probably madness but I'm on a buying spree.
Markets on the way to recovering all the losses that people were fretting about on here a week ago.
And to underline the point I made last week, that fund-based mug punters can't play the market short term even if they want to, here is an example. On the 22Feb I tried to "buy the dip" with some Baillie Gifford Europe, on the H-L platform. I now find that according to the graph, I bought and then it immediately lost 4% of value the next day. WTAF?
Now, can anyone give me any example of another huge retail market where it is perfectly legal to sell the goods to punters and not be able to tell them, in advance, the price you will pay for those goods????
And can anyone give me a good reason why these unit trust funds cannot be priced and traded live in real time, when ETFs apparently can? I mean, I understand that it might be relatively complicated and expensive to make the necessary changes, but I don't think that's a good reason. It's just a convenience for the loaded, skillfully lobbying industry, allowing them to fleece mug punters. Just as for many years they fleeced us with their ridiculous, and as it turns out, entirely unnecessary 5% bid-offer spread pricing.
There, I feel better now
Might have been this morning, but the FTSE is now only 0.3% up on the day & has fallen back slowly sine lunchtime.
That might be a good reason why you should not attempt to trade in "real time" as markets move up & down at a whim and you could easily be caught trading the wrong way.
Nah, sorry, that's not it. I bought that tranche of Baillie Gifford Europe, after I saw the big dive in markets, and decided that big dive was overdone, so I could therefore pick up a "bargain", i.e that fund at 4% less than it had been the day before, for what I judged to be no good long term reason. Turns out that the price I paid was the price before the dive took place. That is just fucked up, sorry for my language. As you know I'm not a day trader, nothing near it, but I try to pick my moments to buy (Less good at the sell bit), and I cannot do that effectively.
Or let me put it another way. Millionsof mug punters now go on price comparison sites for every little thing they buy, and end up buying it from Amazon to save 4% on £20, helping along the process of putting many decent retailers out of business. Yet being stitched up over 4% on £2,000 or more, is just something we should accept?
BUT, you are comparing apples with pears.
You know the funds aren't priced in real time/same day, also unless you went through every stock in the holding the fund may not have gone down in value to the extent you thought anyway, or they may have sold some before the drop etc etc.
I agree with you in part that the way funds are valued doesn't lend itself to doing what you want to do, but you know that so you know you can't rely on an it dropping or increasing based on something entirely different.
If you want to trade real time or near as damn it, ETF's or individual shares.
As I've said many times on here, @pragueaddick, the lack of real time pricing is one of the key reasons I don't invest in unit trusts.
Add in potential liquidity issues due to the open-ended structure, opaque charges, and all sorts of other ways of skimming off your capital and destroy value that is going on underneath and it's a poor product, in my opinion. Mug punters are kept 'happy' with their 7% return but have no sight of what they should have earned - and that's before you take into account that so many underperform.
Then the platforms have the check to charge on a 'assets under management' basis!
As for the technical reason they don't price in real time, it is to do with the fact that they are set up as a trust structure and how they then deal with redemptions and subscriptions overnight. The new ETFs that are not swaps based and invest directly, manage the same process during the day. But they are open to the same redemption and liquidity issues but they can manage them intra-day.
This evening, the FED has given an inflation warning. Hold on to your hats. Now that the US markets are crashing, you will see some very interesting outcomes in the cannabis and crypto EFTs, I think, as all that momentum gets unwound and they start to try to manage intra-data redemptions ....
Helpful insight.
The markets are a bit choppy, I'm in and out of Etoro every 5 minutes, probably madness but I'm on a buying spree.
I think there'll be some bounces but we're overdue a 20-25% correction, so be careful!
I dumped anything high PE and had already stayed away from any momentum plays that had no revenue. A lot of hot money out there and you can already see it rushing for the door.
Markets on the way to recovering all the losses that people were fretting about on here a week ago.
And to underline the point I made last week, that fund-based mug punters can't play the market short term even if they want to, here is an example. On the 22Feb I tried to "buy the dip" with some Baillie Gifford Europe, on the H-L platform. I now find that according to the graph, I bought and then it immediately lost 4% of value the next day. WTAF?
Now, can anyone give me any example of another huge retail market where it is perfectly legal to sell the goods to punters and not be able to tell them, in advance, the price you will pay for those goods????
And can anyone give me a good reason why these unit trust funds cannot be priced and traded live in real time, when ETFs apparently can? I mean, I understand that it might be relatively complicated and expensive to make the necessary changes, but I don't think that's a good reason. It's just a convenience for the loaded, skillfully lobbying industry, allowing them to fleece mug punters. Just as for many years they fleeced us with their ridiculous, and as it turns out, entirely unnecessary 5% bid-offer spread pricing.
There, I feel better now
Might have been this morning, but the FTSE is now only 0.3% up on the day & has fallen back slowly sine lunchtime.
That might be a good reason why you should not attempt to trade in "real time" as markets move up & down at a whim and you could easily be caught trading the wrong way.
Nah, sorry, that's not it. I bought that tranche of Baillie Gifford Europe, after I saw the big dive in markets, and decided that big dive was overdone, so I could therefore pick up a "bargain", i.e that fund at 4% less than it had been the day before, for what I judged to be no good long term reason. Turns out that the price I paid was the price before the dive took place. That is just fucked up, sorry for my language. As you know I'm not a day trader, nothing near it, but I try to pick my moments to buy (Less good at the sell bit), and I cannot do that effectively.
Or let me put it another way. Millionsof mug punters now go on price comparison sites for every little thing they buy, and end up buying it from Amazon to save 4% on £20, helping along the process of putting many decent retailers out of business. Yet being stitched up over 4% on £2,000 or more, is just something we should accept?
BUT, you are comparing apples with pears.
You know the funds aren't priced in real time/same day, also unless you went through every stock in the holding the fund may not have gone down in value to the extent you thought anyway, or they may have sold some before the drop etc etc.
I agree with you in part that the way funds are valued doesn't lend itself to doing what you want to do, but you know that so you know you can't rely on an it dropping or increasing based on something entirely different.
If you want to trade real time or near as damn it, ETF's or individual shares.
As I've said many times on here, @pragueaddick, the lack of real time pricing is one of the key reasons I don't invest in unit trusts.
Add in potential liquidity issues due to the open-ended structure, opaque charges, and all sorts of other ways of skimming off your capital and destroy value that is going on underneath and it's a poor product, in my opinion. Mug punters are kept 'happy' with their 7% return but have no sight of what they should have earned - and that's before you take into account that so many underperform.
Then the platforms have the check to charge on a 'assets under management' basis!
As for the technical reason they don't price in real time, it is to do with the fact that they are set up as a trust structure and how they then deal with redemptions and subscriptions overnight. The new ETFs that are not swaps based and invest directly, manage the same process during the day. But they are open to the same redemption and liquidity issues but they can manage them intra-day.
This evening, the FED has given an inflation warning. Hold on to your hats. Now that the US markets are crashing, you will see some very interesting outcomes in the cannabis and crypto EFTs, I think, as all that momentum gets unwound and they start to try to manage intra-data redemptions ....
Helpful insight.
The markets are a bit choppy, I'm in and out of Etoro every 5 minutes, probably madness but I'm on a buying spree.
I think there'll be some bounces but we're overdue a 20-25% correction, so be careful!
I dumped anything high PE and had already stayed away from any momentum plays that had no revenue. A lot of hot money out there and you can already see it rushing for the door.
To be clear, I'm talking US markets. I think the FTSE won't be as badly affected as already under-valued not tech heavy.
Markets on the way to recovering all the losses that people were fretting about on here a week ago.
And to underline the point I made last week, that fund-based mug punters can't play the market short term even if they want to, here is an example. On the 22Feb I tried to "buy the dip" with some Baillie Gifford Europe, on the H-L platform. I now find that according to the graph, I bought and then it immediately lost 4% of value the next day. WTAF?
Now, can anyone give me any example of another huge retail market where it is perfectly legal to sell the goods to punters and not be able to tell them, in advance, the price you will pay for those goods????
And can anyone give me a good reason why these unit trust funds cannot be priced and traded live in real time, when ETFs apparently can? I mean, I understand that it might be relatively complicated and expensive to make the necessary changes, but I don't think that's a good reason. It's just a convenience for the loaded, skillfully lobbying industry, allowing them to fleece mug punters. Just as for many years they fleeced us with their ridiculous, and as it turns out, entirely unnecessary 5% bid-offer spread pricing.
There, I feel better now
Might have been this morning, but the FTSE is now only 0.3% up on the day & has fallen back slowly sine lunchtime.
That might be a good reason why you should not attempt to trade in "real time" as markets move up & down at a whim and you could easily be caught trading the wrong way.
Nah, sorry, that's not it. I bought that tranche of Baillie Gifford Europe, after I saw the big dive in markets, and decided that big dive was overdone, so I could therefore pick up a "bargain", i.e that fund at 4% less than it had been the day before, for what I judged to be no good long term reason. Turns out that the price I paid was the price before the dive took place. That is just fucked up, sorry for my language. As you know I'm not a day trader, nothing near it, but I try to pick my moments to buy (Less good at the sell bit), and I cannot do that effectively.
Or let me put it another way. Millionsof mug punters now go on price comparison sites for every little thing they buy, and end up buying it from Amazon to save 4% on £20, helping along the process of putting many decent retailers out of business. Yet being stitched up over 4% on £2,000 or more, is just something we should accept?
BUT, you are comparing apples with pears.
You know the funds aren't priced in real time/same day, also unless you went through every stock in the holding the fund may not have gone down in value to the extent you thought anyway, or they may have sold some before the drop etc etc.
I agree with you in part that the way funds are valued doesn't lend itself to doing what you want to do, but you know that so you know you can't rely on an it dropping or increasing based on something entirely different.
If you want to trade real time or near as damn it, ETF's or individual shares.
As I've said many times on here, @pragueaddick, the lack of real time pricing is one of the key reasons I don't invest in unit trusts.
Add in potential liquidity issues due to the open-ended structure, opaque charges, and all sorts of other ways of skimming off your capital and destroy value that is going on underneath and it's a poor product, in my opinion. Mug punters are kept 'happy' with their 7% return but have no sight of what they should have earned - and that's before you take into account that so many underperform.
Then the platforms have the check to charge on a 'assets under management' basis!
As for the technical reason they don't price in real time, it is to do with the fact that they are set up as a trust structure and how they then deal with redemptions and subscriptions overnight. The new ETFs that are not swaps based and invest directly, manage the same process during the day. But they are open to the same redemption and liquidity issues but they can manage them intra-day.
This evening, the FED has given an inflation warning. Hold on to your hats. Now that the US markets are crashing, you will see some very interesting outcomes in the cannabis and crypto EFTs, I think, as all that momentum gets unwound and they start to try to manage intra-data redemptions ....
Helpful insight.
The markets are a bit choppy, I'm in and out of Etoro every 5 minutes, probably madness but I'm on a buying spree.
I think there'll be some bounces but we're overdue a 20-25% correction, so be careful!
I dumped anything high PE and had already stayed away from any momentum plays that had no revenue. A lot of hot money out there and you can already see it rushing for the door.
I'm only testing out EToro app predominantly for bitcoin etc, all really small trades (biggest £50) and I only put £1k in to play with.
More importantly than Prague's difficulties with real time buying, what on earth is going on with the Nasdaq?
Tech shares being sold off left, right and centre this last few days and my BG funds which are obviously heavy with them falling at an alarming rate.
Is this traders just coming into work and not feeling confident, so deciding to have a good old sell off, or is there something much bigger going on here which is going to take the Nasdaq back down to where it came from 6 months ago?
What do the professionals think?
In short, the recent sell-off in bonds (ie. higher rates) disproportionately negatively impacts growth stocks whose value is heavily weighted towards the future (the cashflows in which must now be discounted back to the present at a higher rate due to the time value of money).
If yesterday you could earn say 1% risk-free in govt bonds but today it's 2%, then you will demand a higher potential return from owning a growth company (ie a lower entry price) by virtue of the opportunity cost of staying risk-free having risen.
Inflation should not really be a worry. Its only because the Fed has tied itself to a 2% inflation "target" are US investors wetting themselves. Inflation & interest rates are going nowhere anytime soon. Yes, there maybe be a little bit of inflation due to cyclical issues like food & oil prices but Core inflation, caused by rising incomes chasing rising prices by employees with money to burn wont be seen this Parliament - maybe not even this decade.
Bonds are troublesome at the moment. All I would advise is that fixed income should be part of a balanced portfolio although Gilts might not be the right "sector" of this particular asset class.
I'm looking at Strategic Bonds and Absolute Return Bond funds for my clients portfolios.
Inflation should not really be a worry. Its only because the Fed has tied itself to a 2% inflation "target" are US investors wetting themselves. Inflation & interest rates are going nowhere anytime soon. Yes, there maybe be a little bit of inflation due to cyclical issues like food & oil prices but Core inflation, caused by rising incomes chasing rising prices by employees with money to burn wont be seen this Parliament - maybe not even this decade.
Hope you're right but there's a lot of pent up demand that may meet some fairly static supply. Inflation satisfies the rule that the next disaster is always the one everyone has forgotten about. I know we had inflation in the eighties but really you have to go back to the seventies and not many of us were working then.
More importantly than Prague's difficulties with real time buying, what on earth is going on with the Nasdaq?
Tech shares being sold off left, right and centre this last few days and my BG funds which are obviously heavy with them falling at an alarming rate.
Is this traders just coming into work and not feeling confident, so deciding to have a good old sell off, or is there something much bigger going on here which is going to take the Nasdaq back down to where it came from 6 months ago?
What do the professionals think?
In short, the recent sell-off in bonds (ie. higher rates) disproportionately negatively impacts growth stocks whose value is heavily weighted towards the future (the cashflows in which must now be discounted back to the present at a higher rate due to the time value of money).
If yesterday you could earn say 1% risk-free in govt bonds but today it's 2%, then you will demand a higher potential return from owning a growth company (ie a lower entry price) by virtue of the opportunity cost of staying risk-free having risen.
You only have to look how biotech behaved today to see that.
High PE, anything that is all jam tomorrow but no revenue today and anything that is high debt to operating profit is going to come under pressure.
Currently prices are set once a day for funds (I believe), usually after close. ETF's change price throughout the day and are listed on exchanges so you can get real time pricing.
But you make a fair point, I'm sure it's possible, but doubt that many people who buy funds are day traders, in fact most probably hold for months if not years, so maybe the overall need isn't there?
If you want real time then currently don't trade in funds but trade yourself with individual shares or ETF's or Bitcoin!
I'm not a day trader either. However I do think that if I can buy something 4% cheaper if I stay alert and buy when the price is offered, that 4% is worth banking, no?
As far as I am aware, at no point in a given day can I go on the H-L platform or any other, ascertain the current price of a given fund, and then buy at that price. That is frankly an infringement of the basic law of contract.
If you look closely at the platform on which you trade there should be a clearly defined dealing schedule (daily, weekly etc) and valuation deadline (i.e 9am).
The price you will see quoted should be the previous days NAV meaning that by the time you place a buy order, the fund will have been revalued and you will see fluctuations to account for that day’s trading. If you do your research, like any investor should, this shouldn’t come as a surprise.
Example, if I login to a platform today (4th March) and check a fund that is priced daily, I will see the NAV of the fund at at close of business yesterday (3rd March). If I invest today (4th March at 10am) I will receive the price as at close of business on 4th March.
Ok, so I use Hargreaves Lansdowne and I believe that in this respect they operate like all the other platforms. This is what they have to say (my emphasis in bold)
The price is based on the net asset value (NAV) of the underlying holdings divided by the number of units or shares in issue. Dealing for both types of fund takes place on a forward-pricing basis, which means that a buy or sell instruction is placed at the next available valuation point. For this reason investors do not know the price they will pay or receive until after the deal is completed.
One thing they miss out in that explanation is that funds are valued at different times of day. For example, Fundsmith Equity is valued at 12.00 mid-day (presumably UK time, it does not clarify). So, four hours ago it was priced at 543.34. If I whack my order in now, why, technically, can I not get it that price? H-L and Fundsmith have all of 20 hours to execute the transaction. Far from "not doing my research" I have at least twice asked H-L to explain when a particular price actually applies to a particular transaction. The kindest description of their answer would be "opaque"
When I read people saying it's just not technically possible, I think of Michael Lewis book "Flash Boys". It describes among other things how in the USA people in remote country areas found cables being laid. When they enquired they were told that they were fibre-optic cables. Great, they thought, broadband coming here. Oh, no. They were being laid for the exclusive benefit of JP Morgan, to give them literally nano-seconds of trading advantage over competitors, as well as retail investors. I read that and thought of my H-L experiences... and this book was published in 2014, meaning it describes technical developments which are more than 8 years old.
Truly, we are mug punters.
Blimey, dedicated cables, well outdated now. If you want to play that game today you need optimized hardware which you co-locate in the exchange’s premises, which pretty much eliminates any latency. If you’re going to measure what you can do, against what they are doing, you’ll always lose. They are not looking at long term performance.
I once had someone looking for 10 years of tick data, with cancelled and corrected trades left in place. They wanted to back test an algorithm which they believed could identify erroneous trades and give them a trading advantage in the period before it was corrected.
Crude price looking good #Rob7Lee, surely as demand steps up so does price🙏🙏, I am holding onto my NTOG, COPL & good old punt in the sky UJO.
Agreed, just difficult not to take the final profit, will check but think my holding left was bought at an average of around 22p, current price is best part of 50p so my holding is getting towards 20k. I've set a sale at 52.5p
Same with Go Ahead, and I've got quite a lot of those and sitting at about 55% profit now, I'll probably sell at £13.
Those, Metro Bank (actually in profit now, but only about 10%) and a couple of funds is all that's left in my old SIPP with Fidelity that I didn't transfer to ii. So once it's all cash I'll transfer that final balance to ii and shut down fidelity.
Currently prices are set once a day for funds (I believe), usually after close. ETF's change price throughout the day and are listed on exchanges so you can get real time pricing.
But you make a fair point, I'm sure it's possible, but doubt that many people who buy funds are day traders, in fact most probably hold for months if not years, so maybe the overall need isn't there?
If you want real time then currently don't trade in funds but trade yourself with individual shares or ETF's or Bitcoin!
I'm not a day trader either. However I do think that if I can buy something 4% cheaper if I stay alert and buy when the price is offered, that 4% is worth banking, no?
As far as I am aware, at no point in a given day can I go on the H-L platform or any other, ascertain the current price of a given fund, and then buy at that price. That is frankly an infringement of the basic law of contract.
If you look closely at the platform on which you trade there should be a clearly defined dealing schedule (daily, weekly etc) and valuation deadline (i.e 9am).
The price you will see quoted should be the previous days NAV meaning that by the time you place a buy order, the fund will have been revalued and you will see fluctuations to account for that day’s trading. If you do your research, like any investor should, this shouldn’t come as a surprise.
Example, if I login to a platform today (4th March) and check a fund that is priced daily, I will see the NAV of the fund at at close of business yesterday (3rd March). If I invest today (4th March at 10am) I will receive the price as at close of business on 4th March.
Ok, so I use Hargreaves Lansdowne and I believe that in this respect they operate like all the other platforms. This is what they have to say (my emphasis in bold)
The price is based on the net asset value (NAV) of the underlying holdings divided by the number of units or shares in issue. Dealing for both types of fund takes place on a forward-pricing basis, which means that a buy or sell instruction is placed at the next available valuation point. For this reason investors do not know the price they will pay or receive until after the deal is completed.
One thing they miss out in that explanation is that funds are valued at different times of day. For example, Fundsmith Equity is valued at 12.00 mid-day (presumably UK time, it does not clarify). So, four hours ago it was priced at 543.34. If I whack my order in now, why, technically, can I not get it that price? H-L and Fundsmith have all of 20 hours to execute the transaction. Far from "not doing my research" I have at least twice asked H-L to explain when a particular price actually applies to a particular transaction. The kindest description of their answer would be "opaque"
When I read people saying it's just not technically possible, I think of Michael Lewis book "Flash Boys". It describes among other things how in the USA people in remote country areas found cables being laid. When they enquired they were told that they were fibre-optic cables. Great, they thought, broadband coming here. Oh, no. They were being laid for the exclusive benefit of JP Morgan, to give them literally nano-seconds of trading advantage over competitors, as well as retail investors. I read that and thought of my H-L experiences... and this book was published in 2014, meaning it describes technical developments which are more than 8 years old.
Truly, we are mug punters.
Blimey, dedicated cables, well outdated now. If you want to play that game today you need optimized hardware which you co-locate in the exchange’s premises, which pretty much eliminates any latency. If you’re going to measure what you can do, against what they are doing, you’ll always lose. They are not looking at long term performance.
I once had someone looking for 10 years of tick data, with cancelled and corrected trades left in place. They wanted to back test an algorithm which they believed could identify erroneous trades and give them a trading advantage in the period before it was corrected.
Retail investors are not playing the same game.
Prague is referring to something else.
Notwithstanding co-location, dark fibre and all that malarky, he's referring to underlying causes of the flash crash. Because of fungible listings of stocks across multiple exchanges in the US, the CTAs and HFTs worked out that there were ways of effectively front-running trades between exchanges, by working out short and long-routes around telcos within New York. So, they would print or just spoof on one exchange, and execute on the other before any other HFT could get there. Added to that, some of the newer exchanges modified the price time algorithms to favour price TAKERS, which gave them an even greater advantage.
On top of that they built direct connections, sometimes with micro-wave legs, from Chicago to New York to arbitrage the futures and options versus the cash markets faster than competitors. That's always been a problem since the early days of electronic trading and we saw it again recently with the GAME show.
There were a couple of other things that contributed to the flash crash, which aren't in the book. If I can ever be sure I don't need to work in the City again, I'll try to publish them .... it's mostly written and I have a ghost writer lined up :-)
Had my first small premium bond win this month( not bad for my first investment).Was just wondering how long it takes to transfer into you nominated account.Its still showing up as winnings on my bond account. Thanks
Had my first small premium bond win this month( not bad for my first investment).Was just wondering how long it takes to transfer into you nominated account.Its still showing up as winnings on my bond account. Thanks
It takes around 5 working days from the draw date if selected as winnings to bank account. Mine arrive today
Had my first small premium bond win this month( not bad for my first investment).Was just wondering how long it takes to transfer into you nominated account.Its still showing up as winnings on my bond account. Thanks
It takes around 5 working days from the draw date if selected as winnings to bank account. Mine arrive today
Mine arrived today as well, just check you haven't asked for it to be reinvested.
I've been drip feeding some recent pension money into a Fidelity Investment ISA, various funds, not even half way to allowance yet, have to put in, wondering whether to put it into cash and increase drip feeding or if any fund types are a good bet to spread some of it around right now - any thoughts appreciated.
Had my first small premium bond win this month( not bad for my first investment).Was just wondering how long it takes to transfer into you nominated account.Its still showing up as winnings on my bond account. Thanks
Crude price looking good #Rob7Lee, surely as demand steps up so does price🙏🙏, I am holding onto my NTOG, COPL & good old punt in the sky UJO.
Agreed, just difficult not to take the final profit, will check but think my holding left was bought at an average of around 22p, current price is best part of 50p so my holding is getting towards 20k. I've set a sale at 52.5p
Same with Go Ahead, and I've got quite a lot of those and sitting at about 55% profit now, I'll probably sell at £13.
Those, Metro Bank (actually in profit now, but only about 10%) and a couple of funds is all that's left in my old SIPP with Fidelity that I didn't transfer to ii. So once it's all cash I'll transfer that final balance to ii and shut down fidelity.
Tullow Oil doing well on the back of a strong crude price #Rob7Lee made your 52.5p sale price 👏👏👏
Crude price looking good #Rob7Lee, surely as demand steps up so does price🙏🙏, I am holding onto my NTOG, COPL & good old punt in the sky UJO.
Agreed, just difficult not to take the final profit, will check but think my holding left was bought at an average of around 22p, current price is best part of 50p so my holding is getting towards 20k. I've set a sale at 52.5p
Same with Go Ahead, and I've got quite a lot of those and sitting at about 55% profit now, I'll probably sell at £13.
Those, Metro Bank (actually in profit now, but only about 10%) and a couple of funds is all that's left in my old SIPP with Fidelity that I didn't transfer to ii. So once it's all cash I'll transfer that final balance to ii and shut down fidelity.
Tullow Oil doing well on the back of a strong crude price #Rob7Lee made your 52.5p sale price 👏👏👏
Yup, very happy with Tullow Oil, it peaked around 55p but I'm more than happy with the profit, it actually sold at 53.1p so almost a £12k profit, thankfully in my SIPP so no CGT! It will likely go higher, but I'm not good enough to call the very top (watch it hit £1 with the month ) and that level of return is what dreams are made of!
I've been drip feeding some recent pension money into a Fidelity Investment ISA, various funds, not even half way to allowance yet, have to put in, wondering whether to put it into cash and increase drip feeding or if any fund types are a good bet to spread some of it around right now - any thoughts appreciated.
Depends what you are in already, but if you can certainly worth putting it in to use up allowance even if it's just sitting a cash for a while and drip fed in.
I've been drip feeding some recent pension money into a Fidelity Investment ISA, various funds, not even half way to allowance yet, have to put in, wondering whether to put it into cash and increase drip feeding or if any fund types are a good bet to spread some of it around right now - any thoughts appreciated.
Both Equity & Bonds have dropped over the past 6 weeks - my SIPP is down by around 6% since the start of February. If you want to maximise your ISA allowance before April 5th then no harm in putting money in now so no need to drip feed.
Comments
The price is based on the net asset value (NAV) of the underlying holdings divided by the number of units or shares in issue. Dealing for both types of fund takes place on a forward-pricing basis, which means that a buy or sell instruction is placed at the next available valuation point. For this reason investors do not know the price they will pay or receive until after the deal is completed.
One thing they miss out in that explanation is that funds are valued at different times of day. For example, Fundsmith Equity is valued at 12.00 mid-day (presumably UK time, it does not clarify). So, four hours ago it was priced at 543.34. If I whack my order in now, why, technically, can I not get it that price? H-L and Fundsmith have all of 20 hours to execute the transaction. Far from "not doing my research" I have at least twice asked H-L to explain when a particular price actually applies to a particular transaction. The kindest description of their answer would be "opaque"
When I read people saying it's just not technically possible, I think of Michael Lewis book "Flash Boys". It describes among other things how in the USA people in remote country areas found cables being laid. When they enquired they were told that they were fibre-optic cables. Great, they thought, broadband coming here. Oh, no. They were being laid for the exclusive benefit of JP Morgan, to give them literally nano-seconds of trading advantage over competitors, as well as retail investors. I read that and thought of my H-L experiences... and this book was published in 2014, meaning it describes technical developments which are more than 8 years old.
Truly, we are mug punters.
Tech shares being sold off left, right and centre this last few days and my BG funds which are obviously heavy with them falling at an alarming rate.
Is this traders just coming into work and not feeling confident, so deciding to have a good old sell off, or is there something much bigger going on here which is going to take the Nasdaq back down to where it came from 6 months ago?
What do the professionals think?
Add in potential liquidity issues due to the open-ended structure, opaque charges, and all sorts of other ways of skimming off your capital and destroy value that is going on underneath and it's a poor product, in my opinion. Mug punters are kept 'happy' with their 7% return but have no sight of what they should have earned - and that's before you take into account that so many underperform.
Then the platforms have the check to charge on a 'assets under management' basis!
As for the technical reason they don't price in real time, it is to do with the fact that they are set up as a trust structure and how they then deal with redemptions and subscriptions overnight. The new ETFs that are not swaps based and invest directly, manage the same process during the day. But they are open to the same redemption and liquidity issues but they can manage them intra-day.
This evening, the FED has given an inflation warning. Hold on to your hats. Now that the US markets are crashing, you will see some very interesting outcomes in the cannabis and crypto EFTs, I think, as all that momentum gets unwound and they start to try to manage intra-data redemptions ....
The markets are a bit choppy, I'm in and out of Etoro every 5 minutes, probably madness but I'm on a buying spree.
I dumped anything high PE and had already stayed away from any momentum plays that had no revenue. A lot of hot money out there and you can already see it rushing for the door.
I'm looking at Strategic Bonds and Absolute Return Bond funds for my clients portfolios.
High PE, anything that is all jam tomorrow but no revenue today and anything that is high debt to operating profit is going to come under pressure.
Same with Go Ahead, and I've got quite a lot of those and sitting at about 55% profit now, I'll probably sell at £13.
Those, Metro Bank (actually in profit now, but only about 10%) and a couple of funds is all that's left in my old SIPP with Fidelity that I didn't transfer to ii. So once it's all cash I'll transfer that final balance to ii and shut down fidelity.
Notwithstanding co-location, dark fibre and all that malarky, he's referring to underlying causes of the flash crash. Because of fungible listings of stocks across multiple exchanges in the US, the CTAs and HFTs worked out that there were ways of effectively front-running trades between exchanges, by working out short and long-routes around telcos within New York. So, they would print or just spoof on one exchange, and execute on the other before any other HFT could get there. Added to that, some of the newer exchanges modified the price time algorithms to favour price TAKERS, which gave them an even greater advantage.
On top of that they built direct connections, sometimes with micro-wave legs, from Chicago to New York to arbitrage the futures and options versus the cash markets faster than competitors. That's always been a problem since the early days of electronic trading and we saw it again recently with the GAME show.
There were a couple of other things that contributed to the flash crash, which aren't in the book. If I can ever be sure I don't need to work in the City again, I'll try to publish them .... it's mostly written and I have a ghost writer lined up :-)
Thanks