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Set up a mutual fund

Overview

You can manage the assets in a mutual fund as a portfolio in FA. You can define the share classes in the mutual fund as securities, that are linked to the underlying mutual fund portfolio. If your fund does not have share classes, you should anyway define one share class security to represent the fund. Each share class security can have its own fee structure, which is defined when adding or editing the share class. Shareholders are defined as contacts and the transactions are recorded in the shareholders' portfolios.

Setting up a mutual fund portfolio

You can create a mutual fund portfolio in the FA Fund Management app. In order to add a new fund, use the Fund wizard. To start the wizard:

  1. Go to FA Fund Management.

  2. Open the NAV status view.

  3. Select +Add fund in the upper right corner.

The wizard guides you through the fund parameters that you need to define. See more about the options available in Fund wizard in FA Fund Management Reference.

Setting up fund share classes

Once you have set up your fund portfolio, you need to define one or more share classes for your fund. You can do this in the FA Fund Management app by using the Share class wizard. To start the wizard:

  1. Go to FA Fund Management.

  2. Open the NAV status view.

  3. Select the fund.

  4. Click the Add share class icon.

The wizard guides you through the share class parameters that you need to define. See more about the options available in Share class wizard in FA Fund Management Reference.

Income distribution and swing pricing

If your fund includes the Income distribution feature or the price is affected by the swing price element, read their usage sample here:

Income distribution

Swing pricing

Cut-off times

Depending on your fund management flow, there might be a need to automatically make sure that certain transactions or trade orders that come after the cut-off time are not affecting the NAV calculation. This applies to the following cases:

  • Fund portfolio’s transactions

  • Fund subscriptions/redemptions

To help with this, the following decision table can be utilized:

fa-cut-off-for-fund-pf.xlsx

More information about decision tables can be found in the FA Developer guide: Business rules.

The steps to take this decision table into use are:

  1. Specify the cut-off time in the Fund wizards in FA Fund Management. If you didn't add it when creating the fund, you can add it later by re-opening the wizard.

    1. Go to the FA Fund Management app.

    2. Open the NAV status view, choose the fund and click edit.png.

    3. Select the Order execution tab and enter the time in 24 hour format (for example, 13:00).

    4. Click Save.

  2. Modify the decision table to match your needs. By default, the decision table contains the following rules:

    • Change today's accepted transactions to not finished after cut-off and before NAV calculation

    • Change today's not finished transactions to accepted after NAV calculation

    • Change today's executable orders to rejected after cut-off and before NAV calculation

    • Change today's rejected orders to executable after NAV calculation

  3. Upload the decision table via Tools → Administer → Decision tables.

  4. With this setup, any fund portfolio transactions or fund trade orders that are made after the cut-off time and before NAV has been calculated will change their statuses automatically when saved. Also, if a transaction/trade order would be re-saved after the NAV calculation, its status would get changed back to Accepted/Executable

    • You can use the Run transaction rules or Modify trade orders → Run rules functionalities to mass-change the statuses for larger group of transactions / trade orders

    • The rule run can also be scheduled; refer to the Admin guide for more details: Scheduling - Getting started.Scheduling - Getting started