Funds tend to have two different pricing attached to them – dual pricing as well as single pricing. Dual pricing includes an offer price (price at which a share in a fund can be purchased) and a bid price (price at which a share in a fund can be sold at).
The price of a fund is derived from the value of the underlying investments that it holds, this is also more commonly known as the net asset value. The price of the fund will represent the value of all the holdings or investments in the fund, divided by the number of units in issue. The respective calculation provides a unit value.
As funds are typically less volatile than shares, changes to the price of a fund on a daily basis are usually small in size. Funds are valued once per day unlike the continuous valuation of individual shares. Investors should also note that funds use forward pricing, therefore the exact price at which a fund is purchased or sold will not always be known prior to the deal instruction.
Fund prices can be found on fund managers websites, newspapers and fund market websites. Investors may see two prices listed in the form of accumulation (where income is added to the fund) or income (where income is distributed to the investor).