Open-end Fund offerings come in two ways. Both ways offer the same exposure to the Fund’s portfolio so there is no need to choose one over the other. And both ways are offered via ADDX. The two different ways to subscribe are mentioned below:
The first is where subscriptions are completed against the latest Net Asset Value (NAV). The NAV is determined by the Fund’s administrator by subtracting all the fund’s liabilities from all the fund’s assets, before dividing that figure by all the units held by investors of the fund. Once a subscription or redemption has been submitted to the fund, the NAV at which it will be completed is not yet available. The NAV is determined later, after factoring in all the new subscription and redemption orders, and the latest asset and liability values.
The second is where the Fund offers a new series during each subscription phase. In this scenario subscriptions are completed against a pre-determined NAV, resulting in immediate issuance of new tokens. However, this NAV is different from the NAV of the previous series and it will result in multiple series with multiple NAVs. At the end of the fiscal year, those series are consolidated into a single series.