OPEN-END FUNDS

·Open-end funds seek to raise sufficient capital at launch to make the fund economic to operate but are also able to issue and buy back shares on an ongoing basis - their shares may be issued to and redeemed from the investing public by the management company on any dealing day (usually normal business days) · shares in the fund are issued to investors at a price calculated by a formula agreed by the industry regulator

- similarly investors may sell their fund shares back to the management company at a price calculated by the same formula

· the formula values fund shares simply by dividing the number of fund shares in issue at each valuation into the total net value of the fund at the time of each such valuation

- this calculation provides the net asset value per share (NAV) - the aim is to ensure fairness as between new investors buying into the fund, investors exiting the fund, and investors remaining in the fund by valuing the fund shares accurately · the assets of the fund will comprise stocks and shares which match the investment objectives of the fund - for example in the specimen simple valuation below the total of £50 million may well be made up of shareholdings in say 100 different smaller European companies averaging about £500,000 million each = £50 million

-

Sample valuation