A dealing day is not the day you pressed the button

Buying a fund is not like buying a share. The instruction is placed at one moment and priced at another, and the investor does not know the price when deciding.

Funds price once a day

A fund calculates the value of its holdings at a fixed valuation point, usually once each business day. That calculation produces the price at which all that day's deals are settled.

Orders arriving before the cut-off are grouped and priced at the next valuation point. Orders arriving afterwards wait for the following one, which may be a day later.

This is called forward pricing, and it exists to prevent dealing at a price that is already known to be stale. Nobody can trade on information about a valuation that has occurred.

The uncertainty is unavoidable

Between placing an instruction and it being priced, markets move. The amount of units received for a fixed sum is therefore unknown at the point of instruction.

The gap is short for a fund holding domestic assets and longer for one holding assets in distant time zones, where the valuation point may fall many hours later.

Some funds deal less frequently than daily, particularly those holding assets that are slow to value. Weekly or monthly dealing extends the gap considerably.

Why cut-off times matter more than they appear

Platforms impose their own cut-offs ahead of the fund's, so instructions can be batched and submitted. A platform deadline is therefore earlier than the fund's own.

Missing it by minutes moves the deal to the next valuation point. In a volatile week that single day can matter more than a year of charge differences.

The deadlines are published and are stable, so they only cause difficulty for people dealing at short notice. Scheduled contributions are unaffected by them entirely.

Selling has the same structure

A sale instruction is also priced forward, so the proceeds are unknown when the decision is made. Money is then paid out on a settlement date some days later.

That combination matters for anyone selling to meet a payment. The amount and the arrival date are both uncertain at the moment the instruction is given.

Settlement periods differ by product and jurisdiction and are revised over time, so the interval that applied previously may not be the one that applies now.

Exchange-traded products work differently

A fund traded on an exchange prices continuously through the session, so a price is visible at the moment of dealing and can be constrained with an order type.

That difference is often presented as an advantage. It removes pricing uncertainty and simultaneously introduces the ability to trade repeatedly through the day, which has its own costs.

For a long-horizon contributor the forward-pricing delay is largely irrelevant. It becomes relevant only when a deal has to land at a particular moment, which is rare by design.