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Posted by PeterL on January 29, 2008, 5:06 am
> > After the market close, the fund prices and values its portfolio
> > and subtracts off any liabilities to arrive at net assets. It
>
> What about funds holding foreign stocks that have closed in earlier
> time zones? This used to allow folks to scam the system by trading
> funds that used obsolete closing prices of a few hours or even a four
> day weekend old. In the meantime before YOUR closing, some news had
> arisen that was sure to rock those stocks in a certain direction.
You can't trade most funds. Besides, unless a fund is mostly invested
in foreign stocks, one stock is not usually going to have a major
impact on the NAV.
>
> So somehow I think the "fair value" of certain (non-ADR) stocks are
> used, which is different than (but connected with?) futures. I wonder
> what do they do for stocks in a market to the west which is still
> trading at your closing time, or one to the east that closed earlier?
Outside of NAS and the DOW and perhaps the American Stock Exchange,
these other stock exchanges trade stocks that are not owned by most
mutual funds.
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