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A fund valuation riddle
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Joe C
Posted: 21 February 2025 10:48:54(UTC)
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Is anyone interested in solving a minor mystery?

The same fund (in this case a money market fund) is bought at the same time - to the minute - on the same day in both ISA and SIPP account. The units trade at identical prices and settle same day as each other, as you would expect.

How/why could it now be that the % increase shown for the SIPP holding is markedly different to the % increase for the ISA holding?
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SF100 on 21/02/2025(UTC)
Sara G
Posted: 21 February 2025 10:55:20(UTC)
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Could it be that they update the accounts at different times? Suggest querying it with your platform.
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Joe C on 21/02/2025(UTC)
Joe C
Posted: 21 February 2025 11:14:08(UTC)
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Sara G;335229 wrote:
Could it be that they update the accounts at different times? Suggest querying it with your platform.


That could be an explanation, though if that were the case it would be slightly disconcerting since I have (other) funds duplicated across SIPP and ISA and always just assumed they would match - with regards to the timing of a sale.

Maybe I'll see if the discrepancy still persists into tomorrow before getting in touch.



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Aminatidi
Posted: 21 February 2025 11:22:07(UTC)
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First thing I'd do is check the transaction details for both and confirm they went through at the same price.

Might be the way I read your post but not clear if you've confirmed what the transactions show v what you'd expect them to show 😊
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Joe C on 21/02/2025(UTC), ANDREW FOSTER on 22/02/2025(UTC)
Joe C
Posted: 21 February 2025 11:43:36(UTC)
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It's a fund, so as long as the orders are placed in good time before the dealing cut-off then there shouldn't be anything to go wrong on that side (I assumed anyway, maybe incorrectly?)

Do buying errors occur? I hope not since I've never thought to actually check any of them, if indeed I would even know how - unless I had an identical buy like this to compare with.
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Isaac J
Posted: 22 February 2025 11:40:26(UTC)
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It could just be a mathematical thing. For example, in my workplace pension, I can see the employer and employee contributions separately. Despite buying the exact same fund on the exact same date, the employee part has a % difference a little bit higher than the employee contributions.

I put in all the contributions into Excel to double check, calculating the units myself, which were correct and got the same result. When I adjusted the contribution levels in Excel as a test, the performance also changed (just by a few bps), even though the fund prices were the same.

It seemed to be a rounding thing when buying units. For example, if you buy £100 of a fund at £2.453 and they give you units at 40.7764 (rounded to four decimal places). If you buy £240 at £2.453 on the same day, you get 97.8394 units.

Later the price of the fund goes up to £2.906. Your first 40.7764 units are now worth £118.50. Your second 97.8394 units are now worth £284.32.

So £100 has become £118.50, or an increase of 18.50%
And £240 has become £284.32, or an increase of 18.47%

Obviously these are just example amounts I made up, and the difference is tiny in this example. But in real life with larger varying amounts, different rounding mechanisms, equalisation, how often you buy them etc differences could add up?

Although you did say *markedly* different, so maybe worth some more investigation.
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Joe C on 22/02/2025(UTC)
ANDREW FOSTER
Posted: 22 February 2025 12:51:33(UTC)
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Are the number of units showing as the same?

Are the classes of units held in each the same?

Have you multiplied units number by price to see which/either is actually correct?
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Joe C on 22/02/2025(UTC)
Aminatidi
Posted: 22 February 2025 12:59:14(UTC)
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Joe C;335244 wrote:
It's a fund, so as long as the orders are placed in good time before the dealing cut-off then there shouldn't be anything to go wrong on that side (I assumed anyway, maybe incorrectly?)

Do buying errors occur? I hope not since I've never thought to actually check any of them, if indeed I would even know how - unless I had an identical buy like this to compare with.


Somewhere on your platform there will be a transaction note that should detail the number of units bought and the price paid per unit.

Look for those 👍🏼
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Joe C
Posted: 22 February 2025 15:43:44(UTC)
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Isaac J;335388 wrote:
It could just be a mathematical thing..

It seemed to be a rounding thing when buying units. For example, if you buy £100 of a fund at £2.453 and they give you units at 40.7764 (rounded to four decimal places). If you buy £240 at £2.453 on the same day, you get 97.8394 units.

Obviously these are just example amounts I made up, and the difference is tiny in this example. But in real life with larger varying amounts, different rounding mechanisms, equalisation, how often you buy them etc differences could add up?


This could indeed be the answer, thank you: larger varying amounts combined with however the rounding worked itself out.

Thought I was having a 'Gus from Superman III' moment there. Must get out more.



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Dave64
Posted: 22 February 2025 16:02:16(UTC)
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Unsure of your platform but if you use Interactive Investor one of the trades may have used a free trade credit while the other didn’t. Only talking about £3.99 so would be minimal.

Edit - doing the math - if you only bought £100 in each account and the MMF increased by 0.01% in a day (typical) then after one day the first would be up +0.01% while the second would be down -3.98%

For £10,000 invested in each account the first would be up +0.01% while the second would be down -0.0299%
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