Fund companies across Europe are increasingly adopting a fixed ratio on operational charges, which is a component of the total expense ratio (TER), to increase investor confidence that the costs of funds are fixed and will not be higher than stated and also to simplify accrual management.
However, managing fixed TER expenses in multiple currencies across multiple share classes is nearly impossible with the manual, error-prone spreadsheets that many back offices still use.
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Confluence has announced Unity NXT Budgeting, a new SaaS-enabled automated solution that enables UCITS managers to manage their fund expenses and protect profitability margins through greater control and transparency, reduce the cumulative hours spent on fixed ratio expense oversight, and increase accuracy through the elimination of error-prone spreadsheets.
Skip Smith, COO of Confluence, said: "With Unity NXT Budgeting, fund managers can now reap the benefits of a fixed operation charge ratio without struggling through the pain of a spreadsheet-based expense management solution. Now for the first time, fund managers can make highly informed product decisions about which fund and share class offerings can optimize revenue potential."
Melvin Jayawardana, European market manager for Confluence, said: "Unity NXT Budgeting allows managers to allocate expenses fairly across multiple currencies and share classes, something that was nearly impossible to do accurately with spreadsheets. Managers now have an automated solution that will eliminate manual back office processes and provide transparency and governance around expense management."
Unity NXT Budgeting enables fund managers to:
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By GlobalData- Automatically collect net assets, foreign exchange rates, and bulk invoice payment activity using a secure environment – including checking for missing data.
- Allocate payment activity to appropriate instruments.
- Create fund-level budgets in multiple currencies and project and allocate future expenses.
- Feel confident that the set ratio will cover expenses and more accurately evaluate profitability.
- Calculate, forecast and monitor margin data.
Smith added: "The time has come to exchange complex, confusing, and error-prone methods for an automated, controlled and accurate alternative."
