Setting up a fund: A checklist

A fund marshals a set of components that together enable LUSID to strike a NAV and generate other financial reports.

Recommended tutorial: Preparing a fund for launch

The components that comprise a fund are currently as follows:

You must set up an IBOR as a prerequisite of a fund; that is, master instruments in LUSID, establish positions in one or more transaction portfolios, create recipes, and load market data suitable for valuing all the instruments held in those portfolios.

Step 2: Create a chart of accounts

At a minimum, a chart of accounts (CoA) must have appropriate general ledger accounts and at least one posting module containing rules for posting journal entry lines to those accounts. You can optionally add one or more year-end cleardown modules and general ledger profiles.

Step 3: Create a pricing template

You must create a pricing template specifying fund unitisation rules by identifying general ledger accounts in the underlying CoA that store dealing (subscription and redemption) and P&L activity. This is so LUSID can calculate fund GAV as dealing plus P&L.

Step 4: Optionally, create share classes to add to the fund

You can either unitise the fund or create any number of share classes. Note each share class must be pre-mastered as an instrument.

Step 5: Create the fund itself

When you create a fund you must reference a pricing template and the underlying IBOR, and specify at least one NAV type (for example, ‘daily’) that itself references a CoA, recipes, and settings such as the accounting and amortisation methods to use for a particular audience. You can specify additional NAV types (for example, ‘tax’) with different settings to strike a NAV for different audiences from the same underlying data if you wish.

Step 6: Optionally, add fees to the fund

LUSID calculates fund NAV as GAV minus fees. You can add as many fixed or variable fees as you like to a fund, with different calculation bases.

Step 7: Create one or more valuation points

You should set up a fund calendar consisting of one valuation point per NAV type and reporting date, for example daily at 5pm for the ‘daily’ NAV type. While you can supply an ad-hoc date when striking a NAV, using a valuation point triggers LUSID to generate fund fees and to persist data so reports can always be recreated.

Step 8: Strike a NAV and generate other financial reports

You can strike a NAV and generate other financial reports using a combination of a valuation point and a NAV type.