What is a Domestic Property Protection Fund
Basic knowledge of investment funds
Nevertheless, one should not speak of an “investment square”, since the investment fund, as a special fund, is not a separate legal entity. Although there is a legal relationship between the investors and the custodian, no contract is concluded between the individual investor and the custodian. In fact, the activity of the custodian is of great importance for the investors, because the custodian
- keeps the fund assets,
- issues shares and takes them back,
- pays distribution amounts and sales proceeds to the investors,
- calculates and charges the ongoing fees (e.g. the management or performance fee),
- ensures that the investment conditions are complied with,
- calculates the unit price on each valuation day.
Actual disposals of the fund assets or parts of the fund assets are not made by the KVG, but by the depositary.
2. The securitization of the shares
The units in the investment fund are evidenced in unit certificates. The share certificates are securities. It documents the investor's co-ownership of the fund's assets. Unit certificates have no nominal value, i. H. there is no monetary amount printed on it, but rather they are denominated in a certain number of shares (e.g. 1, 10, 100, 500 or 1000 shares). You handle your securities transactions via a securities account. Your securities portfolio is also managed in this custody account.
3. The determination of the share value
Unlike z. B. In the case of shares, the value of the unit certificates is not determined by supply and demand. To calculate the unit value, the fund's assets are divided by the number of units issued. The fund's assets are determined by deducting all liabilities from all of the fund's assets valued (e.g. securities and cash reserves). The resulting value is referred to as the net asset value (NAV) and is calculated and published by the custodian every trading day.
Example calculation for determining the share value (simplified representation):
Value of total fund assets: EUR 1,000,000
Number of shares issued: 10,000
Determination of the share price: 1,000,000: 10,000 = 100
In this example the unit value is 100 EUR.
Since the price of the securities (e.g. shares or bonds) held by a securities fund fluctuates on a daily basis, the NAV also fluctuates on a daily basis. As a rule, the price that you receive when you redeem your fund units (redemption price) corresponds to the NAV divided by the number of units issued. The redemption price and the issue price, d. H. the price you have to pay to buy the fund units usually differ from one another. The reason for this is that there is a kind of fee when purchasing fund units, the front-end load or premium.
For information on the option of acquiring fund units without a front-end load, see Chapter Q. A redemption fee may apply when units are redeemed.
Buy and sell orders are not necessarily settled at the price that was valid at the time the order was placed, but at a later price that is still unknown to the investor. This so-called "forward pricing" is intended to ensure that investors worldwide have the same requirements. Otherwise z. For example, a well-informed investor can draw conclusions from prices on stock exchanges that are already closed (e.g. USA) and use them for themselves. For each fund, the custodians indicate when the price of your order will be determined or your order will be executed. This information can usually be found under the abbreviation "FP". If the order is entered before the order acceptance deadline, the settlement price of the current trading day applies when "t + 0" is specified. The indication “t + 1” means that the order will be executed one day after the next order acceptance deadline, etc. The term “cut-off time” is also used for the order acceptance deadline. Cut-off times between 10 a.m. and 4 p.m. and forward pricing of “t + 0” to “t + 3” are common.
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