11 Dec Outsource Your NAV Calculation
Alternative investment asset continues to grow towards full maturity. And investment pros are desperately trying to encourage service performance to attract investors. It includes certain important criteria to draw the attention of conscious investors.
One peculiar & extremely effective factor lies with NAV calculation. Promising results can obviously take in some investors. Outsourcing the evaluated NAV is gradually becoming an integral part of corporate fund administration & management.
Outsourcing Fund Factors
Fund managers are getting more engaged in outsourcing certain parts of fund administration. It allows the relevant authority to understand the capability of the company’s doing. Of course, one primary objective concerns with the creation of better value for the investors.
NAV stands for Net Asset Value, determined by calculating specific data. Production of NAV is one crucial task almost every investment firm has to pull off. Not to mention, asset managers have to measure the NAV per working day or so. It’s one key function regarding fund administration to require sufficient oversight with contingency arrangement.
NAV Calculation Process
Although calculating any particular fund factor may sound easy, it actually accounts for lots of things. And NAV itself is one perfect example of the complexity. The basic data required to determine NAV goes as follows –
- Listings of portfolio transactions (from portfolio managers/traders)
- Security valuation from certain fund pricing service.
- Custodian enlisting of overall transactions in cash.
- Accounting all sorts of additional income & receivable.
- Though information service feeding.
- Identification & determination of dividend income.
- Specified expense accrual for the targeted time.
- Transfer agent summary from shareholder transactions.
- Recording of all sorts of shareholder cash movement.
Apart from the information, you should give some deeper insight into the overall calculation. There are two basic parts included – Methodology & Framework.
NAV Oversight Methodology
- Data Integrity Checking
- Top-Down Validations
- Standard Validation Library
- Bottom-Up Validations
- Auto Clearance of Exception
- Multi-Exception Clearance
Control & Analysis Framework
- Actual NAV vs Expected NAV
- Charting & Analytics
- Service Level Awareness
- Analysis of NAV Movement
- Share Class Divergence
- Benchmark & Sister Fund Divergence
- Marker or Checker Review
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