Forward Pricing

Definition - What does Forward Pricing mean?

Forward pricing is the way in which open end mutual funds are valued for investors who wish to purchase or redeem shares of the fund. Mutual funds usually price their shares at the end of the business day. The price to be paid or received by the investor will be the price that is next calculated after the fund receives their order.

Testopedia explains Forward Pricing

Open end mutual funds are priced by formula. That formula is NAV + SC = POP. When the fund company determines the net asset value (NAV) it adds the sales charge (SC) to determine the public offering price (POP) for investors who wish to purchase the shares. Investors who wish to redeem the shares will redeem their shares at the NAV. All shares will be purchased at the POP that is next calculated after the purchase order is received. All investors who wish to redeem their shares will receive the NAV that is next calculated after the redemption order is received.

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