Personal Finance

Locked: Mutual fund value drops while waiting for transfer to chequing account

  • Last Updated:
  • Jul 25th, 2020 6:32 pm
[OP]
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Feb 12, 2019
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Mutual fund value drops while waiting for transfer to chequing account

I tried to transfer all fund from a CIBC mutual fund account to a chequing account.

It's been over 24 hours, money still not moved, the value of mutual fund dropped +$50, why should I lose $50 just because they couldn't move the money fast enough, the rate should be the day I choose to take the money out, not the rate when the day the money is actually being taken out. THIS IS BULLCRAP.

Is there a bank that has its shit together', and can do it faster than these suckers at CIBC?
43 replies
Deal Guru
Dec 5, 2006
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Markham
TheMeat wrote: I tried to transfer all fund from a CIBC mutual fund account to a chequing account.

It's been over 24 hours, money still not moved, the value of mutual fund dropped +$50, why should I lose $50 just because they couldn't move the money fast enough, the rate should be the day I choose to take the money out, not the rate when the day the money is actually being taken out. THIS IS BULLCRAP.

Is there a bank that has its shit together', and can do it faster than these suckers at CIBC?
Not sure cibc, but in TD, if you switch or sell after 3 pm, the price is decided by next day closing price

Which time did you sell mutual funds
[OP]
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Feb 12, 2019
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smartie wrote: Not sure cibc, but in TD, if you switch or sell after 3 pm, the price is decided by next day closing price

Which time did you sell mutual funds
Thanks for the reply!

So if I wanted the mutual fund value locked in TD, I should call telephone banking in the morning? I called CIBC yesterday after work, so it was about 5:30 pm.
Deal Addict
Sep 19, 2009
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TheMeat wrote: Thanks for the reply!

So if I wanted the mutual fund value locked in TD, I should call telephone banking in the morning? I called CIBC yesterday after work, so it was about 5:30 pm.
Mutual fund prices are set daily, after the stock market closes, usually around 6pm. Whenever you place an MF order the price is unknown. In Canada the cutoff time for MF orders is 2pm. If an order is placed before 2pm, it will execute same day, at a price published at 6pm. After 2pm, next day 6pm.

So, the value of the position you see in the account is meaningless, before you sell the position.
Last edited by andrew4321 on Jul 24th, 2020 7:02 pm, edited 1 time in total.
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Oct 16, 2008
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OP

Would you complain if it went up by $50? It is depending on timing of request.
...
[OP]
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Feb 12, 2019
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teoconca wrote: OP

Would you complain if it went up by $50? It is depending on timing of request.
My complaint is that none of these so-called "financial service representatives" ever mentioned the mutual fund closing time to me.

Financial service representatives are just as bad as user car salesman, lawyers and real estate developers.
Deal Addict
Oct 27, 2012
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TheMeat wrote: My complaint is that none of these so-called "financial service representatives" ever mentioned the mutual fund closing time to me.

Financial service representatives are just as bad as user car salesman, lawyers and real estate developers.
The fund's prospectus would have disclosed that. Of course, you probably didn't read it and you deflect the blame onto others.
Deal Guru
Dec 5, 2006
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TheMeat wrote: My complaint is that none of these so-called "financial service representatives" ever mentioned the mutual fund closing time to me.

Financial service representatives are just as bad as user car salesman, lawyers and real estate developers.
That's ok. OP, we learn by doing. Next week when big tech report results, mutual fund price might go even lower, so you lost 50 today but might have saved 500

Have a good weekend
[OP]
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Feb 12, 2019
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ozzie16 wrote: The fund's prospectus would have disclosed that. Of course, you probably didn't read it and you deflect the blame onto others.
You sound like one of those guys that read every line every time there's a user agreement update on your email or ebay.
Newbie
May 9, 2018
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andrew4321 wrote: Mutual fund prices are set daily, after the stock market closes, usually around 6pm. Whenever you place an MF order the price is unknown. In Canada the cutoff time for MF orders is 2pm. If an order is placed before 2pm, it will execute same day, at a price published at 6pm. After 2pm, next day 6pm.

So, the value of the position you see in the account is meaningless, before you sell the position.
Don't forget settlement is t+2, so funds won't hit the account same day if it's anything other than a money market fund
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Jan 19, 2017
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TheMeat wrote: I tried to transfer all fund from a CIBC mutual fund account to a chequing account.

It's been over 24 hours, money still not moved, the value of mutual fund dropped +$50, why should I lose $50 just because they couldn't move the money fast enough, the rate should be the day I choose to take the money out, not the rate when the day the money is actually being taken out. THIS IS BULLCRAP.

Is there a bank that has its shit together', and can do it faster than these suckers at CIBC?
The title is not correct. It is called redemption or sale of the mutual fund units. Then the proceed of the sale is deposited into your cheque get acct.
[OP]
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Feb 12, 2019
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ml88888888 wrote: The title is not correct. It is called redemption or sale of the mutual fund units. Then the proceed of the sale is deposited into your cheque get acct.
I don't care about this "proceed of the sale", they just need to give me whatever money I have in the account on the day I made the phone call, the money they gain or lose through the "proceed of the sale" on the next day should be on them.

It should be added or docked from the wages of the so-called "fund manager".

Their process is garbage.

The only reason I keep some money in there is for future real estate investment.
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Jul 1, 2007
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It's generally common knowledge that mutual funds don't trade throughout the day on the open market, meaning you can't expect them to sell your mutual fund at the open, in the morning. If you request to sell your mutual fund at 5:30PM (90 minutes after the markets close, in eastern time), then your sale is processed at the close the next day. Always closing value, not the value throughout the day.
Money Smarts Blog wrote: I agree with the previous posters, especially Thalo. {And} Thalo's advice is spot on.
Deal Addict
Jun 8, 2004
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This has nothing to do with CIBC. All mutual funds operate this way in Canada since they were introduced in the late 80s.
You will never know the price when you buy or sell mutual funds. The price is always determined after the markets close. Settlement of the funds is delayed as well.

Only exception are money market funds that have a fixed nav of $10.
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Jan 19, 2017
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TheMeat wrote: I don't care about this "proceed of the sale", they just need to give me whatever money I have in the account on the day I made the phone call, the money they gain or lose through the "proceed of the sale" on the next day should be on them.

It should be added or docked from the wages of the so-called "fund manager".

Their process is garbage.

The only reason I keep some money in there is for future real estate investment.
You called at 5:30pm to place your order. Even if you had stock, instead of mutual fund, to sell, the stock market was closed already. So you can only get the price for next day, when stock market was opened again.
Just because you don’t understand how the mutual fund or stock market works, you can only blame yourself.
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Dec 24, 2007
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TheMeat wrote: I don't care about this "proceed of the sale", they just need to give me whatever money I have in the account on the day I made the phone call, the money they gain or lose through the "proceed of the sale" on the next day should be on them.

It should be added or docked from the wages of the so-called "fund manager".

Their process is garbage.

The only reason I keep some money in there is for future real estate investment.
Start to grow up and accept that the world doesn't revolve around you and how you would like it to be...

Ignore the fine print, legal agreements, and all the disclaimers that you see at your peril.

You're not going to find any sympathy for your wilful ignorance and whining here.
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Jan 21, 2012
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OP’s confusion over the transacting times for mutual fund sales is very understandable. But his sense of entitlement and rush to blame others is not.
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TheMeat wrote: You sound like one of those guys that read every line every time there's a user agreement update on your email or ebay.
It's up to you (or the consumer) to read it. It's like renting a luxury car with your higher end credit card and declining the LDW coverage and not knowing that your credit card doesn't cover luxury cars and then either blaming the credit card company for it or blaming the car rental company for not telling you that credit card companies usually don't cover luxury cars.

I'm as guilty as the next person in terms of reading the changes in user agreements but I don't go crying over spilled milk when something is stated and generally known, doesn't go the way that I expect that it should go because I misunderstood how it works.

The price of a mutual fund is based on stocks. Stocks go up/down throughout the day but when you check your mutual fund price, it stays the same during the day since the price is determined at the end of the day. Unlike stocks, when you sell mutual funds, it isn't sold at the time that you issued your order, it is sold at the end of the business day.

Not only that but the proceeds of the sale can take the following business day to be deposited into your account. This means if you urgently need money on the same day for whatever reason, selling your mutual funds won't accomplish this.

The only time you are protected against fluctuation is if you are selling a money market mutual fund which are set at $10/unit.

If you want to know with certainty the price that you are buying at or selling at, invest in stocks or money market mutual funds.
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Oct 27, 2012
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lmcjipo wrote: If you want to know with certainty the price that you are buying at or selling at, invest in stocks or money market mutual funds.
This is also an advantage of ETFs over mutual funds if one doesn’t want to be a stock picker. But I’m sure the OP would complain again if they used a market order as opposed to a limit order and it wasn’t fulfilled at the exact same price they saw.
Deal Expert
May 30, 2005
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TheMeat wrote: I don't care about this "proceed of the sale", they just need to give me whatever money I have in the account on the day I made the phone call, the money they gain or lose through the "proceed of the sale" on the next day should be on them.

It should be added or docked from the wages of the so-called "fund manager".

Their process is garbage.

The only reason I keep some money in there is for future real estate investment.
If you made the cut off (in this case you didn't), your funds would have been sold at the price of that day, regardless of when the money actually gets credited to your chequing account, which could take a few days to settle. Just because there's a few days delay in actually getting the money doesn't mean they didn't process your order yet.

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