Your Investment's Unit Price: How It's Calculated and Updated

Kernel's equity Funds are all index funds. This means we aim to mirror the performance of a specific market index. Think of an index as a theoretical benchmark – it doesn't have real-world costs or complexities like actual investments do. Because of this, it's not possible to match the index perfectly all the time. Sometimes, this even means our fund might perform a little better than the index.

To figure out the value of your fund, we look at the value of all the individual investments it holds. We follow standard international practices for this. For things like the stocks and bonds within your fund that are traded on public markets, we use their official published closing price for the day. For other holdings that might not be publicly traded (like a cash deposit the fund holds, where we'd include any interest earned up to that point), we calculate a specific value. And when your fund holds investments in different currencies, we use a widely recognized global benchmark rate set at 4 p.m. London time (often called the WM Reuters benchmark fix) to convert their value.

We calculate and update the unit price for your fund every business day. This process takes a bit of time, so the updated price is usually available around 5 pm on the next business day. This price reflects the fund's value based on the closing market information from the day the valuation was for.

Very rarely, there might be a slight delay in updating the price. If this happens, you can expect the price to be updated by 5 pm on the following business day.

The unit price you usually see on your dashboard is the most recently published one. For instance, if you check your dashboard on a Wednesday before 5 pm, the unit price shown would typically be from Monday (or even earlier depending on weekends and public holiday).

We use what's known as "T+2 settlement" for all transactions, which is the industry standard. T+2 simply means that when you decide to buy or sell units, it takes two business days for your order to be fully processed and settled. One benefit of this system is that you generally don't pay tax as you go and can stay fully invested. However, if you sell units, this is usually when any outstanding tax since April 1st is calculated and applied.

Once your order has settled (after the T+2 period), you'll see the exact unit price that was applied to your specific transaction. This price will be the unit price for the purchase date.

The purchase date for your transaction is the business day when your order's status changed from "pending" to "processing" in your activity list. This is the calendar date your investment was effectively locked in. In fund management, we use a concept called forward pricing. This is important because it means orders must always be placed before the daily valuation happens. This ensures fairness, so no investor can use information that isn't yet public to gain an unfair advantage over others.

The valuation you see on your dashboard for your Funds or KiwiSaver isn't live or real-time. Due to different time zones around the world and the time it takes to process unit prices, the displayed price is typically two business days behind.