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Apply swing pricing

FA Fund Management app lets you calculate swing adjustment for the NAV. Swing pricing is designed to protect existing investors in a fund from the costs incurred when other investors buy or sell units in that fund. NAV per unit is adjusted with the swing factor (in percentage) when net cash flow exceeds the defined thresholds:

  • If positive net cash flow exceeds the threshold, NAV is swung upwards:

    Equation 26. 
    NAV*(1+(SwingFactor/100))NAV*(1+(SwingFactor/100))


  • If negative net cash flow exceeds the threshold, NAV is swung downwards:

    Equation 27. 
    NAV*(1-(SwingFactor)/100))NAV*(1-(SwingFactor)/100))


Swing calculation sums up cash flows originating from all share classes on NAV date.

Set up swing pricing

To set up swing pricing:

  1. Choose the fund in the NAV status view and click edit.png to open the Fund wizard.

  2. Go to the Swing pricing tab and choose Apply swing pricing.

  3. Fill in the fields:

    Official NAV

    A setting to choose how swing adjustment is used in your fund. Choose one of the options:

    • Swung NAV - Swing adjustment is included in official NAV. The logic of handling swing adjustment is shown in the table.

    • Unswung NAV – Swing adjustment is not included in official NAV. The logic of handling swing adjustment is shown in the table.

    Official NAV = Swung NAV

    Official NAV = Unswung NAV

    Reports and positions

    Swung NAV

    Unswung

    Trade orders and transactions

    Swung NAV

    Swung

    Swing factor

    Swing factor is used for adjusting the unit price.

    • For swinging up – The percentage to adjust the unit price if the net inflow of the fund exceeds the threshold.

    • For swinging down – The percentage to adjust the unit price if the net outflow of the fund exceeds the threshold.

    Thresholds

    Swing thresholds are the net inflow or net outflow of the fund that triggers the adjustment to the NAV. You can set a threshold in fund currency or as a percentage of the fund's total net asset value on the NAV date.

    • For swinging up – Net inflow that triggers swinging up.

    • For swinging down – Net outflow that triggers swinging down.

Calculate swing adjustment

Swing adjustment is calculated automatically when you calculate NAV. Depending on your settings, it can be included in NAV or calculated separately and not included in the NAV you publish. To view the NAV and Unswung NAV/Swung NAV, open the NAV window, Share classes tab.

fund_share_classes_tab_swing.png

In FA Back, NAV and Unswung NAV/Swung NAV are shown in the Security window, Market data info tab.

fund_market_data_security_window.png

Close 4 field shows NAV in the fund’s base currency depending on swing pricing settings for the fund:

  • Unswung NAV, if you choose swung NAV as official NAV.

  • Swung NAV, if you choose unswung NAV as official NAV.

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