Investment Centre

Unit prices explanation

An advantage of the unit pricing approach is that different prices can be used for inwards and outwards cash flows to reflect the costs of buying and selling investments, thus improving equity between members. These prices are referred to as “allocation” (or “buy”) unit prices and “withdrawal” ("redemption" or “sell”) unit prices respectively. 

The unit pricing approach is commonly employed by investment vehicles such as cash management trusts and managed funds. Inward cash flows (contributions and benefits transferred-in) are converted to units by dividing the cash amounts by the allocation unit price, while outward cash flows are derived by multiplying the number of units being cashed, by the withdrawal unit price.  The value of a member’s benefit at any time is the aggregate over all Investment Options of the numbers of units held in each Option multiplied by the withdrawal unit prices at that time.

As part of the annual review process, a full reconciliation of member balances is undertaken against Accountants Super's general ledger. As Accountants Super does not carry reserves, any reconciling balance (whether positive or negative) is allocated to member accounts via an adjustment to the unit prices at the end of the financial year. This process can only be undertaken at the end of the financial year when all known income and expense items are brought to account.

The returns that are achieved by each of the Investment Options are incorporated into unit prices for each Option. Generally, the unit prices for each Option are determined weekly.  The unit price is equal to the underlying assets of the Option after:

1. adjustment for costs of buying and selling assets (the buy and sell spreads);
2. adjustment for any other provisions the Trustee considers appropriate (e.g. tax and fund expenses);
3. divided by the number of units in existence. 

The buy and sell spreads reflect the transaction charges (for example brokerage) for buying and selling assets.  The investment manager debits the buy/sell spread against the pool of assets held by the investment manager on behalf of Accountants Super when the transactions occur. 

It is not a fee paid to Accountants Super or Trustee and is used to ensure the approximate costs of entering, exiting and transacting in Accountants Super are borne by the individual member rather than the other members.