Fund of funds cash adjustments allow you to add or subtract amounts from the cash balance brought back by the fund of funds cash ledger rule when you process fund of funds cash allocations.
You can use fund of funds cash adjustments to adjust the cash balance. You can include or exclude a cash balance that is not on the cash ledger to the total cash balance used in the fund of funds allocation process. For example if a trade is supposed to settle on the processing date, but the trade fails, the system does not include the failed trade in the cash balance. Fund of funds cash adjustments give you the option of including the failed trade amount into the cash balance, allows you to make an adjustment to the cash balance to account for the failed trade.
You can also use fund of funds cash adjustments to adjust the fund of funds cash flow amount. to represent any miscellaneous cash that requires allocation. This approach is available only for use with top-level funds that use the Security Level Target with Rebalance fund of funds allocation method, You can input a cash flow adjustment amount for the system to process for any miscellaneous cash as part of the second allocation.
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