A fund of funds allocation rule identifies which fund of funds allocation methodology the system uses for an entity when you process fund of funds cash allocations. It also defines the cash ledger rule, cash bounds, and broker to use. After you create a fund of funds allocation rule, you can assign it to each top-level entity that plans to utilize the fund of funds cash allocation process based on those criteria.
The system uses the reference data in the fund of funds allocation rule to calculate the cash flow and final allocation amounts for each underlying security. The six available fund of fund allocation methods include Actual, Rebalance_Asset_Class, Rebalance_Over_Under, Rebalance_Target, Security_Over_Under, and User_Defined. For more information, see Understand the Fund of Funds Allocation Process. The system uses the cash ledger rule associated with the fund of funds allocation rule to retrieve the cash balance used in the cash flow calculation. The cash bounds on the rule determine the final cash flow used to allocate down to the underlying funds. The system uses the broker code on the fund of funds allocation rule as the broker code when the fund of fund allocation process produces the pending trades.
You can create, edit, and delete fund of funds allocation rules. You can also view the active fund of funds allocation rules or view a history of all the updates to the fund of funds allocation rule.
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