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Historic Pricing

Historic pricing refers to the practice of valuing assets, such as mutual funds or securities, based on their price at the end of the previous trading day.

Example

An investor purchases shares of a mutual fund at the NAV of $50, which was determined based on the closing prices of the previous trading day.

Key points

• Values assets based on the price at the end of the previous trading day.

• Commonly used in mutual funds to ensure consistent pricing for investors.

• Helps prevent discrepancies or manipulation in asset valuation.

Quick Answers to Curious Questions

It ensures that all investors receive the same asset value for a given day, promoting fairness and preventing timing discrepancies in fund transactions.

Investors benefit from consistent pricing and transparency, as their buy or sell orders are based on a clear valuation at the end of the previous day.

Historic pricing can delay the reflection of current market conditions in asset valuations, potentially leading to pricing discrepancies during volatile markets.