I recently moved my ISA to IE. As IE didn’t have the corresponding ETF (LifeStrategy 80), it was transferred as cash. I instructed them to buy 72% VHVG, 8% VFEG and 20% VAGS. I was emailed once the trades had gone through. However, the numbers don’t add up.
VHVG 723.78218 units @ £84.14. Cost to me, £60,902.21. But 723.78218 x £84.14 = £60,899.03.
VFEG 133.57501 units @ £50.51. Cost to me, £6,746.73. 133.57501 X £50.51 = 6,746.87.
VAGS 685.204177 units @ £24.69. Cost to me, £16917.28. 685.204177 x £24.69 = 16,917.69.
So I clicked 14p and 41p in my favour but “lost” £3.18 on VHVG.
By my reckoning, if I have paid £60,902.21, £6,746.73 and £16917.28, then my unit holdings should be 723.819943, 133.572164 and 685.187525 based on the unit prices.
Any explanation for the discrepancy in the numbers?
My day job is writing and debugging financial software, so I tend to be sensitive to noticing when numbers don’t add up.
Hi @Devilment, welcome to the InvestEngine Community! I’ve passed this on to the team to have a look at - hopefully we’ll have some answers for you soon!
The prices aren’t in whole pennies, the prices are either rounded up or down to the nearest penny. 60902.21/723.78218 = 84.14439 - so this is the true price of the unit
There’s an £84.144/share trade for VHVG showing on LSE at 15:01 on the 10th if that is your trade. It’s for £136k but could be IE had other purchases to amalgamate.
LSE website price display probably rounded too (shows 3dp), but does show that transactions are often actually priced in sub-pennies.
If trades are being executed with fractional pennies, then it may be useful for InvestEngine to do one or more of the following:
State the unit prices on the email they send out with a higher number of decimal places.
Have a disclaimer in the email that the reported unit price has been rounded to 2 d.p.
Add an explanation to the FAQ section explaining why prices are presented to 2 d.p. and to get a true unit price you need to divide total cost of purchase by number of units.
I recently had to fix a bug in our software that was due to an insufficient number of decimal places, thus causing a loss of precision, so I get twitchy about such things.
Hi @Devilment ! Thank you for the question. Please allow me to share the following extract from our FAQ section;
Kindly note: both the price (£) and quantity of ETFs are being rounded up to 2 and 6 decimals respectively. To avoid confusion, we elect to only show the prices to 2 decimals (£ and pennies) but trades are actually executed with the price calculated with up to 6 decimal places. This may explain the slight inconsistency between the total amount of the trade and a number you might get when calculating this amount with the price and number of units.