Understand Fund of Funds Cash Allocations

When you use Eagle's mutual fund accounting solution to allocate fund of fund cash flows, the process calculates the cash flow, allocation percentages, and the resulting trades. It calculates the cash flow amount and the trade amount for each underlying security of a fund of fund structure. The system bases the trade amount for each underlying security upon a calculation in one of six different allocation methods.

Before you begin, review Understand the Fund of Funds Allocation Process, which describes how the system calculates the cash allocations, and explains the available allocation methods. 

Setup, processing, and reporting for fund of funds cash allocations can include the following tasks:

• Setup tasks include:

  • Create Fund of Funds Cash Rules. You can create and maintain rules that identify the accounting basis and range of ledger accounts used that the system uses to retrieve the daily cash balance. 

  • Create Fund of Funds Allocation Rules. You can create and maintain rules that identify the allocation method, cash ledger rule, cash bounds, and broker to use during processing. You can then assign the rule to each top-level entity that uses the fund of funds cash allocation process based on those criteria. 

  • Create Fund of Funds Targets. You can create and maintain rules that identify the underlying securities to include in the fund of fund cash allocation process for a master fund and define the allocation percentages that the system uses to calculate each fund of fund allocation method. 

  • Create Fund of Funds Cash Adjustments. You can create and maintain fund of funds cash adjustments as needed to adjust the cash balance or the fund of funds cash flow amount.

• Processing and review tasks include: 

  • Post Fund of Funds Allocations. You can use the Post Fund of Funds Allocation panel for fund of funds allocation processing. Or you can use Automated Event Wrapper for automated processing.

  • Run Fund of Funds Pending Trades. You can create pending trades for funds that use a fund of funds allocation rule where you set NAV Price to Current.

  • View Loopbacks for Fund of Funds Pending Trades. After processing, you can view the pending trade loopbacks in the Global Process Workspace.

  • List Pending Trades for Fund of Funds Allocations. After processing, you can view pending trades that the system generated during the fund of funds cash allocation process. 

  • List Fund of Funds Allocation Activity. After processing, you can review fund of funds allocation activity and fund of funds cash flow calculations.

  • Review pending transactions. You have the option to update and approve the pending transactions as needed, and have the option to manually release them for processing by the STAR accounting engine. Or you can generate a report of pending trades for review purposes, can delete the pending trades, and can receive the trades into the accounting system at a later time. For general information about working with pending transactions, see Manage Pending Trades.

  • Use Control Center with Fund of Funds Allocations. You can set up and use Control Center's Edit FOF Cash Flow Test, EFFCT, edit test to see if a difference exists between the calculated cash flow amount and the sum total of all the trades booked by the fund of fund allocation process.

• Manage Theoretical Fund of Funds Allocations. You can view theoretical allocations for that fund by entering different target rates or allocation methods.