In this article you will find answers to the following frequently asked questions:
- Which funds are available for online trading?
- What are the trading hours for online trading?
- What is forward pricing?
- What is the minimum initial trade size?
- What is the minimum subsequent investment trade size?
- Can I trade at the price I see on the platform?
- What order types are available?
- How does a Subscription (Buy) order work?
- How does Redemption (Sell) order work?
- How do I transfer my Funds portfolio to Saxo?
- What happens if an order fails?
- Can there be partial fills?
- Can an order be cancelled?
Which funds are available for online trading?
For an overview of Saxo’s funds offering, please visit the product page.
The funds are spread across all classic potential exposures and cover anything from government bonds to emerging markets or even opaque markets.
The instrument universe is ever evolving, and new fund houses and instruments are added ongoingly. In the fund space full coverage is never a possibility as the universe of active instruments in the world is extremely dynamic and potentially very niche.
What are the trading hours for online trading?
Funds can be traded online at any time; however, funds are forward-priced (at the outset) and the execution will only occur at the next available valuation point for the fund (typically confirmed the next day).
The valuation point is determined by the fund but is generally between 12-16.00 CET.
By submitting a Subscription or Redemption request on the platform you enter a binding buy/sell order; the price and execution will normally take place at the next valuation point.
What is forward pricing?
Unlike shares, funds are usually traded once per day.
Each fund has a valuation point typically referred to as a ‘cut-off’. At this time the fund manager will calculate the value per unit based on the value of the underlying investments. This is the price at which units are bought and sold and it reflects the accurate value of underlying investments at the time (NAV).
Requesting a trade means the order is held until the next valuation point.
Therefore, you will not know the price at which the trade is executed as it will be determined in the future, based on the value of the underlying assets in the fund at the next valuation point i.e., on a forward basis.
Fund trading terms
All the funds offered by Saxo can be traded daily, however, when investing in funds the time horizon suggested is usually of a greater investment horizon.
Funds are traded directly with the fund manager.
The fund manager will create or redeem units based on the daily transactions within the fund. Therefore, the number of units in circulation will fluctuate from day to day.
Investors will receive fractional units as allocation based on the valuation of the underlying assets.
Read more: Funds trading conditions
What is the minimum initial trade size?
Funds have different minimum subscription amounts depending on the conditions set by the fund manager. This is noted in the trade ticket under trading conditions.
Most minimums are waived for our clients.
Subscriptions are made in the instrument currency, rather than the account currency.
What is the minimum subsequent investment trade size?
If you have already invested in a fund and wish to invest further, a different minimum will apply. This is significantly lower than the initial subscription amount.
Can I trade at the price I see on the platform?
The price you will see on the platform for a fund in the trade ticket is the last known NAV price.
Funds are forward-priced, and the price received for a buy or sell will not be known until after execution with the fund manager.
Timing a trade in respect of intra-day movements of the underlying investments is extremely difficult and not intended.
The purpose of a fund is to fulfil a long-term investment objective, not day trading.
What order types are available?
Subscription (Buy) in value denominated in the instrument currency – Alternative buy in units unknown cash required (units at Forward price).
Redemption (Sell) can be either by value OR number of units.
Switch funds (Sell X and Buy Y) with one order.
How does a Subscription (Buy) order work?
The request to subscribe (buy) is captured by Saxo and sent for execution with the fund manager at the next available valuation point.
Until the order has been executed it will be listed in ‘Orders’. The amount subscribed will be reserved and therefore not available for other trading.
How does Redemption (Sell) order work?
Request to redeem can be made by value OR number of units. You need to own the fund on the account to redeem it. Positions are also required to be settled before they can be sold again, essentially eliminating any day trading as an option.
Similar to a Subscription, the trade is captured by Saxo and sent to the fund manager for execution at the next available valuation point.
Until the order has been executed it will be listed in ‘Orders’.
Once the Fund Manager confirms the order details the position will be shown as ‘Square’ in the platform; similar to any other trade and netting occurs overnight.
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Please note: Due to forward pricing, there will be a delay between requesting a Redemption and the order being executed and confirmed. |
How do I transfer my Funds portfolio to Saxo?
In order to transfer your Funds portfolio to Saxo please follow the instructions outlined here.
What happens if an order fails?
An order is extremely unlikely to fail due to the creation/redemption process i.e. there is not a limited supply of units/shares available. In the unlikely event that a trade fails, Saxo cannot be held liable.
Can there be partial fills?
No, as noted the fund manager will create or redeem units based on the underlying value of all assets held by the fund and apportion units to investors based on the NAV.
Can an order be cancelled?
You can cancel an order in the platform ahead of the external routing, this is a short window relative and once passed the order is binding.
Order routing can be assessed in the trading conditions on the instrument.
Trading costs
Saxo will charge you zero commission when investing in funds.
Custody Fee: A fee of 0.4% p.a. (classic accounts), 0.2% p.a. (platinum accounts) or 0.1% (VIP accounts) is charged on open Mutual Fund positions. (kindly refer to the Funds trading conditions for additional information). When investing in mutual funds you will pay a management fee to the fund provider, which can vary from fund to fund.