Forward Pricing
A Securities and Exchange Commission regulation that requires that investment companies price all of their buy and sell orders of fund shares according to the next net asset value (NAV). This valuation process is for open-end mutual fund transactions in which the mutual fund itself is constantly issuing and redeeming mutual fund shares at the most recent NAV per share. Investopedia Says:
Forward pricing is implemented when a trade is placed to buy or sell shares of an open-end mutual fund. This occurs because open-end funds only recalculate the net asset value of their mutual fund shares after the market closes each trading day. As a result, any mutual fund order placed by an investor can't be quoted at a previous net asset value price, and must instead be given according to the next computed net asset valuation. Related Terms:
Investment Company
Mutual Fund
Net Asset Value - NAV
Open-End Fund
Order
Securities And Exchange Commission - SEC
Security
Trade |