To use this calculation method, select the Begin NAV method option when you set up a Dynamic Mutual Fund Returns field. The Minimum NAV method is the default. If you edit a Dynamic Mutual Fund Returns field that was created using a prior version, the option remains defaulted to use the Minimum NAV method unless you change it. See the following figure.
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Here is an example of how the CDSC Load Method option works:
- Sample database profile is MF Multiperiod Returns 6.0 – CDSC Methods.
- NAVs, income distributions, and loads shown in the following figure.
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There are three returns: a no-load return and CDSC loadadjusted returns using each of two load-adjustment options. See the following figure.
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The spreadsheet in the following figure shows the methodology for calculating the returns.
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The 3-day no-load return is –3.313%. This return is equal to the change in NAV plus dividends reinvested at the end-date per share NAV. To calculate this return in PACE, set the dynamic return field parameters with the Load Adjustment processing option disabled. See the following figure.
Figure : Load Adjustment Processing Option Disabled
Next, the load-adjusted return using the minimum (begin, end) NAV method is -8.146%. The return is equal to the change in NAV, plus reinvested dividends, less the dollar load equal to the lesser of the begin or ending NAV, times the load percentage times, the initial number of shares. To calculate this return in PACE, set the load-adjustment option on, and use the default Minimum NAV Method.
Finally, the load-adjusted return using the new option to use the begin NAV is -8.313%. In this example, the beginning NAV is higher than the ending NAV, so the load dollars are higher, and the return (-8.313%) is then lower than in the previous example. To calculate this return in PACE, set the load adjustment option on and use the Minimum NAV method.