Trading managed funds

See Trading using Adviser Online for instructions on placing a trade for a managed fund.

You can view the managed funds available for your client in the Investment Menu.

If you’d like to invest in a managed fund that isn’t on the Investment Menu, you’ll need to contact the fund manager directly to request that the fund is added to the platform.

To get the fund added, the fund manager needs to both agree to make the fund available on the Wrap platform and be able to meet our operational and governance requirements.

A managed fund could be closed to new applications for multiple reasons, including but not limited to:

• the fund is no longer an approved product on our menu
• the fund manager has closed the asset
• the fund is suspended/terminating.

The way cash is used in managed fund transactions depends on where the order was placed, and whether the transaction relates to daily or non-daily priced funds.

Daily priced funds

• Adviser Online:  You’ll have the option to select whether your managed fund buy order is funded from cash, or sale proceeds (switch order). If sale proceeds are insufficient to fund the buy order, the remainder will be taken from available cash.
  
• Wrap Online: Managed fund buy orders will automatically be funded from the proceeds of managed fund sell orders if those sells are placed in the same transaction with the buy orders. The system will automatically create a switch order in which the buy will go to market once the proceeds of the sale are received. If you want to use available cash to purchase managed funds, first place and authorise the buy orders, then return to the transacting screen and placing any required sells.

Non-daily priced funds

• The account must have sufficient available cash to fund all buys of non-daily priced funds
• All sales of non-daily priced funds will be credited to the cash hub and the proceeds can’t be used until they are received and cleared in the cash hub.

For more information about non-daily priced funds, please review the non-daily pricing fund schedule. Please note non-daily priced funds may be subject to longer settlement periods.

When switching between managed funds, the buy orders are funded from proceeds of the sell orders, until all proceeds are allocated. Any remaining buy orders are funded from available cash. 

The allocation logic is below:

• Buy orders get allocated portions of funding sell orders sorted by original order amounts, from largest to smallest
• Where sell order amount is greater than next unallocated buy order amount, such sell order is used to fund multiple buy orders
• Where sell order amount is smaller than the next unallocated buy order amount, that buy order gets split into multiple orders to be funded from proceeds from multiple sell orders 
• When all sell orders are allocated to fund buy orders, the rest of managed funds buy orders are funded from available cash
• All managed funds orders funded from proceeds are sent to market only after their corresponding sell order is completed.

Should a purchase of a managed fund asset be funded from proceeds from multiple sell orders, each portion of that purchase gets sent to fund managers as separate orders, and only when corresponding funding sell order gets completed. This can result in different portions of the original buy order being sent to market and completed across multiple days, depending on dates of completion of their funding orders.

Where you’re placing a partial sale that’s greater than 94% of the current value of that holding, you may be required to either: 

• increase the sale to a full redemption, or 
• reduce the sale to less than 94% of the current value.

When a full redemption and associated buys are placed for a daily priced managed investment or a non-daily priced fund that accepts daily instructions, the system will convert the buy dollar amounts to a percentage of the sale order.

Once the sale proceeds are received, reciprocal buy orders are created and sent to market. This does not apply to SMAs which require sufficient available cash to fund the application order.

Timeframes for sale proceeds from SMAs will depend on the amount of available cash being held in the SMA Model.

Full redemption examples

Listed below are two examples of how full redemptions from managed investments (excluding SMAs) are processed.

Example 1: One (1) full redemption being credited to two (2) buys

• Fund A $100,000 Full redemption (estimate only)
• Fund B $60,000 buy (60 per cent of sale proceeds will be applied to this fund)
• Fund C $40,000 buy (40 per cent of sale proceeds will be applied to this fund).

The buy orders will be created and sent to market once the sale proceeds have been completed. Orders created: 3 (one sell and 2 buys). 

Transaction fees (if applicable depending on the product type): 3 (one sell and 2 buys). 

Example 2: One (1) partial redemption and two (2) full redemptions being credited to two (2) buys

• Fund A $20,000 partial redemption
• Fund B $50,000 full redemption (estimate only)
• Fund C $30,000 full redemption (estimate only) 
• Fund D $60,000 buy. This will be split as follows:
  • $20,000 buy (funded by $20,000 proceeds from Fund A partial redemption)
  • $40,000 buy (funded by 80 per cent of proceeds from Fund B full redemption)
• Fund E $40,000 buy. This will be split as follows: 
  • $10,000 buy (funded by 20 per cent of proceeds from Fund B full redemption)
  • $30,000 buy (funded by 100 per cent of proceeds from Fund C full redemption)

Once the proceeds from the sale of Fund B have been received, two buy orders will be generated based on the percentage of the original estimate value (80 per cent for Fund D, and 20 per cent for Fund E).

Once the proceeds from the sale of Fund C have been received, one buy order will be generated based on the percentage of the original estimate value (100 per cent for Fund E). Orders created: 7 (3 sells and 4 buys).

Transaction fees (if applicable depending on the product type): 5 (3 sells and 2 buys).

You can place several different transactions and a combination of transactions via a single authorisation step.

Some transactions require sufficient available cash prior to the order being placed.