Taking too long to invest/rebalance Investment Trust Pie

Why does it take days to complete investments in Investment Trusts? Each time I either invest more in the Pie or wish to add another asset and rebalance, it takes forever and often fails to do so at all.

@Flyfisher welcome to the forum. The speed at which trades execute depend on a number of factors including the market on which they trade, liquidity and volume.

Was there a specific instrument?

To buy shares in an asset you need a seller. Without a seller, it can take time to process.

Lately I’ve noticed that the app has changed in how it functions. When a market is closed, T212 used make a pending order. Now it gives a notification saying investment has failed and puts the money into ‘cash’ within the pie. Make sure the market isn’t closed if you are seeing failure in purchases.

Hi krr13, Thanks for your advice Yes, it seems to be the London quoted Jupiter Emerging & Frontier Income Trust plc that is the cause of the delays each time. It was tipped by the Telegraph some weeks ago so I am surprised it is not traded more.

It is extremely low liquidity it appears. The price hasn’t changed at all for the past week:

And has only changed once in the past month:

This usually gives a wider spread, which is fairly wide IMO:

Therefore you’re immediately at quite a big loss as soon as you buy. Because of the low liquidity, I personally wouldn’t recommend buying this through a pie as these are all market orders. And because it’s so rare to find a seller to buy from, you could find it’s buying at prices way above you’re willing to pay. So if you want to hold this ETF, I’d say the best route is to buy it with a limit order outside of the pie. And if you really want it contained in the pie you can import it after.

I’m not telling you to do this, but it’s a warning that you might have a bad time using it in the pie. And again because of these huge wait times for the order to execute.

100% what he said :point_up_2:

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212s price information is wrong and unreliable

It’s trading volume isnt that high but there’s no real reason it should be failing or taking days to fill, everyone else is filling orders without issue.

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I’m not certain about this information, but I think because he’s buying it in a pie it’s a near certainty that it will be bought as a fraction. And because it’s fractional I think it needs to be bought OTC from another Trading 212 user, which causes this problem. So again, doing a limit order with whole shares outside of the pie should allow him to buy the share on the exchange. The graph you show is a month and even still there is a lot of flatness. If you see the LSE website there can be an hour before a trade. The trading volume on the 31st was 42,000, and 17,000 of that was in the last 4 trades of the day. You can see the average number of trades each day is less than 15:

So really it shows how difficult it still is to trade even through the exchange. Low liquidity is tough.

Yeah i can see what you mean about fractionals potentially making it far more difficult to trade.

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I could be wrong but don’t FT essentially buy a whole share and divide it up as necessary to give greater liquidity to fractionals? Ie the maximum exposure for FT is only ever part of one share of any particular stock (and in reality it is less as they can use fractions for different customers).

If T212 are not doing that but relying on intra-T212 customer trades for fractional shares then the liquidity of fractionals will be significantly lower on t212.

It’s definitely possible that Trading 212 so this, as I said I have no idea how it works. But might be worth noting that whole shares should technically be easier to trade

Neither do I. I have looked, but have never found any article explaining how Robinhood, or any other broker offering fractional shares, does it technically. How do they manage to meet best price execution guarantees if the fractional shares are actually being allocated from a small in house inventory of whole shares, as I suppose? I assume market makers only trade in whole shares. So where does the best execution market price for a fractional share come from?

I am curious. But it may be something of a trade secret how this is done. I can think of more than one possible method.

Whenever I have bought fractional shares and then checked charts the price seems fine for that point in time.