Did You Know? | Fund Price

Our Family Office Portfolio Management System includes a Fund Price, also known as Securitisation. This is a metric which normalises the fund performance at the price level.

What is it?

The Fund Price is a measure used to quickly examine your fund’s performance.

It is typically set at 1 at your fund’s inception. This value will then go up and down, varying with performance. For example, if one year after inception the Fund Price is 1.15, this means that your fund has improved 15% through performance. If it later increases to 1.25, it has improved by a further 10% of the initial value through performance.

Crucially, this value does not vary with the size of the fund. If your Fund Price is 1.1 and then you increase your fund’s size with a large subscription, the Fund Price will remain at 1.1. After this, the performance will be weighted relative to the new quantity.

Why would I use it?

The Fund Price only varies with performance. This makes it an accurate measure of how well your funds are performing, compared to the overall NAV, which can be skewed by subscriptions and redemptions.

This makes tracking your fund’s performance straight-forward, and is especially useful in Client Reporting. Moreover, it makes it easier to compare performance over time, and relative to any desired benchmark.

Fund Price is also used in calculating performance statistics, such as risk-adjusted measures like the Sharpe Ratio (for more information, see our recent update about risk-adjusted return ratios).

Where can I find it?

Fund Price is accessible under the title ‘Nav/Share’ in either:

  • Portfolio Summary
  • Position Reporting

Where can I find out more?

Check out our page on our Family Office Portfolio Management System.

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