How funds are priced and when your deal goes through

When you buy or sell a fund, you do not get a live market price the way you do with a share. Fund prices are set at fixed moments, called valuation points, and for most funds that happens just once a day, usually at noon on a working day¹. That means you place your order without knowing the exact price you will pay or receive, and the deal only goes through once the price has been calculated.

The practical consequence is the dealing cut-off time. To be dealt at a given day's price, your order has to reach the fund manager or platform before a deadline, which for many funds falls in late morning or early afternoon. Fidelity, for example, prices most funds at 12 noon with a dealing cut-off of 11am². Miss the cut-off and your order is normally rolled forward to the next valuation point, so you get the following working day's price instead.

This page explains how cut-off times and valuation points work, why the price is not known in advance (a system called forward pricing), how the rules differ between unit trusts, OEICs and ETFs, the charges that affect what you actually pay and receive, and what can go wrong with timing and price.

Dealing cut-off times: often late morning to early afternoon

A dealing cut-off is the latest time an instruction can be received for it to be included in that day's dealing. The cut-off sits before the valuation point, because the fund manager needs time to collect all the orders, work out how much money is coming in and going out, and value the fund's assets before setting a single price.

The exact time varies from fund to fund and platform to platform, but the pattern across the industry is late morning to early afternoon:

The Hargreaves Lansdown example shows how much the platform's own deadline can differ from the fund's. Even though the fund's valuation point is at 12 noon, the platform asks you to place the deal by 8am to be sure of that day's price, with a window between 8am and 9am that depends on trading volumes, and anything after 9am getting the next working day's price¹. A platform's cut-off is always earlier than, or at least no later than, the fund's own deadline, because the platform has to pass the instruction on.

Cut-offs can also move on particular days. Quilter states that on dates where the market may close early, particularly Christmas Eve and New Year's Eve, it will typically have a single dealing cut-off of 12:00 midday, or 10:30am for model portfolio trades⁵. If you are dealing close to a public holiday or at the end of the year, it is worth checking the platform's announcements for that day.

Some funds deal more than once a day. Quilter gives exchange traded investments two dealing times during a working day, 12.15pm and 3.15pm, with trades inside a model portfolio needing to be submitted by 10.45am for the 12.15pm dealing and by 2pm for the 3.15pm dealing⁵. One fund range on the platform, the 1OAK Multi Asset 80 UCITs, has cut-offs of 10:45 inside models and 11:00 outside models, with a 17:00 dealing point⁵. So while once-a-day pricing is the norm, it is not universal, and the fund's documents set the rule.

Forward pricing: from cut-off to valuation point

Forward pricing is the system under which a fund deal is carried out at a price calculated after the order is placed. You agree to buy or sell a number of units, or to invest a sum of money, and the price is whatever the fund manager works out at the next valuation point. The alternative, historic pricing, would use a price already published, but UK funds overwhelmingly use forward pricing, and it is the reason you cannot know your exact deal price in advance.

Hargreaves Lansdown puts the contrast with shares plainly:

The price is usually set at noon on a working day¹. Halifax makes the same point in its own words: fund prices do not fluctuate throughout the day, they are set at the end of the day⁸.

The reason for forward pricing is fairness. A fund is a collection of lots of different people's money, managed by a professional fund manager who invests it across a range of different assets, like shares, property or other assets depending on the fund⁹. To set a price, the manager has to value every holding at the same moment. If deals were priced at an old price, a large inflow or outflow could leave existing investors bearing the dealing costs of the newcomers, or vice versa. Forward pricing, sometimes combined with swing pricing or a dilution adjustment (covered on our page about swing pricing and dilution adjustments), passes those costs to the investors whose trading causes them.

The gap between order and price has one further consequence: settlement takes time. Freetrade explains that after the cut-off time, it may in some cases take several days for the fund manager to confirm your transaction⁴. Fidelity also warns that switching money from one fund to another can take more than two days to complete, and that your money is not invested during that time². A switch is two deals, a sale priced at one valuation point and a purchase priced at another, with the money out of the market in between.

Unit trusts, OEICs and ETFs: how the dealing rules differ

Most funds you can buy on a platform are unit trusts or OEICs (open-ended investment companies). Both are "open ended": the fund creates units when people buy and cancels them when people sell, and both are forward priced at a valuation point, usually once a day. The mechanics of the two structures differ, which our page on OEICs, unit trusts and other fund structures explains, but from a dealing point of view they behave the same way: you place an order before a cut-off, and you get the next valuation point's price.

Exchange traded funds (ETFs) are different. An ETF is a fund whose units are listed on a stock exchange and traded like shares, so its price moves through the trading day and you deal at a live market price rather than waiting for a valuation point. That is why Quilter's exchange traded investments have two dealing times during a working day, 12.15pm and 3.15pm, rather than a single noon valuation⁵, and why platforms treat ETF trades more like share trades than fund trades.

Investment trusts sit apart again. They are companies with a fixed number of shares, listed on the stock market, so you buy and sell at a share price set by supply and demand, not at a valuation of the underlying assets. Which? notes that investment platforms treat investment trusts in a similar way to shares, so you will likely have to pay one-off fees when you buy and sell trusts, even if fund trading is free¹¹. The Association of Investment Companies lists investment trusts, unit trusts and ETFs as the main types of fund⁹, and our pages on investment trusts and ETFs cover each in detail.

The table sums up the difference in kind:

Charges that affect what you pay and receive

Several layers of charge sit between the money you send and the units you end up holding, and some of them bite at the moment of dealing.

Fund charges. Which? sets out the main types: an ongoing charge figure (OCF), an annual percentage paid to the fund manager however the fund performs; performance fees; trading fees and stamp duty reserve tax on the fund's own buying and selling; exit fees; and platform fees¹³. Our page on fund charges and the ongoing charges figure covers these in detail. Hargreaves Lansdown adds that funds often levy an initial fee when you invest, up to 5.5%, alongside an ongoing charge typically around 1%¹. An initial charge is deducted before units are bought, so it directly reduces the number of units your money buys. Which? also notes that annual management fees can differ significantly from one fund to another¹⁴.

Platform dealing fees. Which? explains that on investment platforms you might be charged each time you buy and sell a share, investment trust or exchange traded fund, but fees for buying and selling traditional funds are less common¹². So the same platform may charge nothing to deal in an OEIC but a one-off fee to deal in an ETF or investment trust, which is a real difference in cost between fund types. Our pages on investment platform fees and dealing charges cover how these work.

Switching costs. Moving money from one fund to another on the same platform is two deals, and Fidelity warns the process can take more than two days with your money not invested during that time². If there is an initial fee on the fund you switch into, or an exit fee on the fund you leave, the switch costs more than the dealing alone.

Stamp duty. Stamp duty reserve tax applies to share purchases, including ETFs and investment trusts, but not to purchases of units in unit trusts or OEICs. The fund's own internal trading may carry stamp duty, which shows up inside the fund's costs¹³. Our page on stamp duty on shares explains the rates.

Where to find a fund's own charges: Evelyn points investors to the Key Information Document (KID), the risk section of the fund's prospectus and the fund factsheet¹⁵, and our page on fund documents explains what each one contains.

What can go wrong with timing and price

Missing a cut-off. The most common timing problem is simply arriving too late. An order placed after the cut-off is normally dealt at the next valuation point, so you get the following working day's price³. That is not just an administrative delay: the price you receive can be materially different from the one you expected, because fund prices move with the underlying assets. The Financial Ombudsman has considered exactly this kind of complaint. In one case study about a currency transfer, the business said it had missed that day's cut-off but could complete the transfer by the next working day¹⁶. The lesson is the same for funds: the deadline is the deadline, and what happens after it is a different deal.

Money out of the market during a switch. Fidelity states that switching between funds can take more than two days, and your money is not invested during that time². If markets move in that window, you do not participate. The same applies in reverse when you sell: the price is fixed at the valuation point, but the cash may take days to reach your account.

Slow transfers between platforms. Moving funds from one platform to another is slower still. Freetrade says transfers of mutual funds can take up to eight weeks to complete, depending on the other provider, the type of account and other factors⁴. A Financial Ombudsman case study records a transfer of share dealing accounts to a new platform with a delay of over five months, in which the customer claimed a £30,000 loss¹⁷. During a transfer your investments are typically held as they are, but you may not be able to deal on them, and the receiving platform's cut-offs apply once the transfer completes.

Funds that deal infrequently. Some funds do not offer daily dealing at all. The FCA's risk summary for a long-term asset fund gives a worked example:

That is the regulator's own illustration of how long the gap between selling and being paid can be for funds that hold assets which are hard to sell quickly¹⁸. Our page on fund suspensions covers what happens when a fund stops dealing altogether.

Price movements you cannot control. Because forward pricing means dealing blind, the price you get reflects whatever the underlying assets did up to the valuation point. Evelyn's product terms carry the standard warning that past performance is not a guide to future performance¹⁵, and Standard Life makes the basic point that you will pay charges and cannot invest for free¹⁹. Neither the platform nor the fund manager guarantees a price, and a complaint about the price you received will generally turn on whether the correct procedure was followed, not on whether the price suited you.

Minimums and getting started

Funds are accessible with small amounts. Hargreaves Lansdown says you can normally invest from £100 as a lump sum or £25 per month¹. The Association of Investment Companies says you can invest small amounts starting from around £50 a month²⁰, and investment trusts can also be bought from as little as £50 a month²⁰. Minimums are set by the fund, the platform or both, so check both before choosing where to hold the investment.

The benefits the Association of Investment Companies lists for funds generally include access to a wider range of investments than you could normally buy yourself, management by an expert fund manager, diversification across a number of different investments, economies of scale as costs are spread among investors, the ability to invest in specific markets or industries, and the option to choose a fund that invests in line with your personal values²⁰. Standard Life adds that a professional fund manager decides what to buy on your behalf based on the fund's aims and objectives¹⁹, and funds come in actively managed and passively managed varieties, a distinction our page on active vs passive investing explains⁸.

If you are new to funds, our pages on investment funds, how investment platforms work and where to hold investments cover the ground step by step.

Where to get help

If something goes wrong with a deal, a price or a transfer, the first step is a complaint to the platform or fund manager, using its formal complaints process. If the firm does not resolve the complaint within eight weeks or you are unhappy with its answer, you can take it to the Financial Ombudsman Service, which is free. The Ombudsman's case studies on transfer delays and missed cut-offs show the kinds of complaints it decides¹⁷.

For general, free guidance on investing, MoneyHelper, the government-backed money guidance service, is a starting point, and our page on investment risk explains how to think about the risks before dealing. If you believe you were given unsuitable advice to buy a fund, our page on mis-sold investments and bad investment advice sets out your options, and what happens if an investment platform fails covers the protections that apply when a firm itself gets into trouble.