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Vanguard Fund Price Calculation
01-21-2008, 06:50 PM
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#1
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Dryer sheet aficionado
Join Date: Jan 2008
Posts: 46
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Vanguard Fund Price Calculation
Can someone explain how a mutual fund NAV is calculated when a fund is bought?
Real question is if I place an order at 10AM or 2AM tomorrow, will my buy in price differ or is it calculated at days end?
I may buy the VTI index and need some guidance on that issue.
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01-21-2008, 06:53 PM
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#2
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jun 2002
Location: Texas: No Country for Old Men
Posts: 50,021
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Fund prices are calculated at days end on the day purchased.
__________________
Numbers is hard
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01-21-2008, 07:14 PM
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#3
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Dryer sheet aficionado
Join Date: Jan 2008
Posts: 46
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REW,
thanks. That what I just told a friend but wanted to confirm. But that seems very strange cause the buyer and seller are basically blind to what they are receiving.
So if I wanted VGTSX, place and order early, it might end up the day being a bargain or a bust.
But if I wait till 3PM, I'll have a better idea of what I might get.
Strange.
But again, I appreciate that info.
 Quote:
Originally Posted by REWahoo
Fund prices are calculated at days end on the day purchased.
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01-21-2008, 07:17 PM
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#4
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jun 2002
Location: Texas: No Country for Old Men
Posts: 50,021
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Quote:
Originally Posted by Puppy Belly
So if I wanted VGTSX, place and order early, it might end up the day being a bargain or a bust.
But if I wait till 3PM, I'll have a better idea of what I might get.
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Exactly.
__________________
Numbers is hard
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01-21-2008, 07:25 PM
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#5
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Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Join Date: Dec 2003
Location: Losing my whump
Posts: 22,708
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Some fund families have different cut off times for funds, some are a bit earlier. Check with the funds policies and whoever you're trading through.
This is what a lot of the fund families got in trouble over a few years ago. Some were allowing 'special' customers to see the >4pm closing price and then decide if they wanted a buy/sell order allegedly made earlier in the day to post as though it had been made earlier...
__________________
Be fearful when others are greedy, and greedy when others are fearful. Just another form of "buy low, sell high" for those who have trouble with things. This rule is not universal. Do not buy a 1973 Pinto because everyone else is afraid of it.
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01-21-2008, 07:48 PM
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#6
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Thinks s/he gets paid by the post
Join Date: Jul 2005
Posts: 4,366
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VTI is an ETF. The price you pay for that is just like a normal stock price, and you own the shares immediately any time of the trading day. It may be higher or lower than the NAV, which is still available once a day. Different from a normal fund, and could be riskier with the sparsely traded ETF's.
Dan
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01-21-2008, 07:56 PM
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#7
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Dryer sheet aficionado
Join Date: Jan 2008
Posts: 46
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CFB, and REW,
thanks for the info and the candor.
I seem to recall some financial author had recently written a book that took Mutual Funds to task.
But I blew it off as "yeah, right". Maybe I should find a copy for the wife. I really need some reasoning to get her energized to be watchful.
Hope the market goes into neutal/holding.
I hope trading gets suspended. Seems this holiday puts the US at risk.
Hey, what the hey, if funds can after price. Wall street should take a page and say, hey, all prices are frozen till we decide to trade again. Nice.
Again, thanks.
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