How are funds priced?

There are three main areas of fund pricing which may affect investors.

Bid/offer/mid price

These terms refer to the price that investors can buy or sell units or shares in an investment fund.

• The bid price is the price per unit or share received for each unit/share sold back to the fund
• The offer price is the price to purchase each unit/share of the fund
• Mid price: all of Artemis’ funds operate on a single-price basis, known as the ‘mid’ price; investors can buy or sell units or shares at the same price. The mid price reflects the mid point of the buying (offer) and selling (bid) point of the fund’s assets. It is the ‘net asset value per share’ (NAV), being the fund’s assets less its liabilities, divided by the number of shares.

Swing pricing

Swing pricing is a process designed to protect existing investors in a fund from the costs incurred when other investors buy or sell units or shares of that fund. It adjusts, or swings, up or down the net asset value (NAV) of the fund, which is the price at which investors buy and sell shares in the fund (as above).

It is designed to capture the costs incurred by the fund of new investors coming in or existing investors going out. Swing pricing is intended to pass those extra trading cost back to those specific investors who are doing the buying or selling of shares in the fund, rather than being absorbed into the fund’s wider administration costs which are shared among all investors.

Swing pricing can take two forms: full swing pricing and partial swing pricing:

• Full swing pricing is where the fund’s manager swings the price whenever there are any net flows into or out of a fund
• Partial swing pricing is where the manager only swings the price when net flows exceed a pre-set threshold

Dilution adjustment

When there are large inflows or outflows to a fund, the price at which units or shares in a fund are bought or sold can be adjusted.

Similar to swing pricing, the purpose of this to reduce the impact on existing investors in the fund. The price is adjusted so that investors who are buying/selling shares in the fund pay their fair share of the cost. This is known as a dilution adjustment.

The normally only applies where the net inflows or outflows are significant on any particular day, although it will only be imposed where the estimated potential cost to the relevant fund justifies its application.

This information is intended to provide you with help and guidance about investing generally and about investing with Artemis. It is not a marketing communication and should not be used to make investment decisions. You should always refer to the relevant fund prospectus and KIID/KID before making any final investment decisions.

Artemis does not provide investment advice on the advantages or suitability of its products and no information provided should be viewed in this way. Should you be unsure about the suitability of an investment, you should consult a suitably qualified professional adviser.