Your next NAV error will be caused by a corporate action. How can I make such a bold prediction? More NAV errors are caused by corporate actions than by anything else. So, in all likelihood, the next NAV error will be caused by a corporate action. It might be a stock split or a rights issue, a paydown or a merger. Nobody knows. But what we do know is it’s coming. So what can you do about it?
In this post I’ll focus on a common enough error caused by a simple corporate action; a stock split.
If humans are involved in a process, there will be errors. There are often many humans playing their part in the various stages of trade processing, reconciliation, accounting and ultimate production of the net asset valuation, the NAV, of a mutual fund or a hedge fund.