Let’s say I have a pie with the following target allocations:
- Security A: 90%
- Security B: 10%
Since the lowest is 10%, the minimum amount that can be invested is €10, so that 10% of €10 is €1 which is the minimum amount that can be invested. All good so far.
Now let’s assume that the actual allocation has drifted because Security B has been performing better than A, and that investing €X and choosing self balancing would invest all €X into security A.
Currently, even though no funds will be invested into Security B, T212 still requires €10 minimum.
In this case, since all funds would go into a single security, the minimum investment should be €1.
If there are more instruments, the calculation for the minimum amount should take into account the percentage of the funds that will be invested into each security.