Today I came across a ticket, in order to solve it I need to find those holdings portfolioId (That means to find the pool). To my surprise, a few holdings are actually sharing the same pool that means those holdings actually in the same portfolio investment pool.
I don't know why the asset manager initiates such strategy (because of fee issue or something? because if I do an investment I may just invest in one share class type of a specific portfolio pool) So I went a bit further and came accross this public education message.
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Mutual Fund Classes
Known as "multi-class funds," some mutual funds offer investors different types of shares, known as "classes." Each class will invest in the same "pool" (or investment portfolio) of securities and will have the same investment objectives and policies. But each class will have different shareholder services and/or distribution arrangements with differentfees and expenses and, therefore, different performance results. A multi-class structure offers investors the ability to select a fee and expense structure that is most appropriate for their investment goals (including the time that they expect to remain invested in the fund).
For example, you might find a multi-class fund with three classes of shares that are sold to the general public—Class A, Class B, and Class C—and a class that is sold only to institutional investors—Class I.
- Class A shares might have a front-end sales load (a type of fee that investors pay when they purchase fund shares).
- Class B shares might not have any front-end sales load, but might have a contingent deferred sales load (CDSL) (a type of fee that investors pay only when they redeem fund shares, and that typically decreases to zero if the investors hold their shares long enough) and a12b-1 fee (an annual fee paid by the fund for distribution and/or shareholder services). Class B shares also might convert automatically to a class of shares with a lower 12b-1 fee if held by investors long enough.
- Class C shares might have a 12b-1 fee and a CDSL or front-end sales load, but the CDSL or sales load would be lower than Class B's CDSL or Class A's front-end sales load, and the Class would not convert to another class.
- Class I would be sold only to institutional investors and might have different fees and expenses.
If a fund offers multiple classes, it may describe them all in a single prospectus, or it may describe them separately in separate prospectuses. The decision as to which class best suits an investor's investment goals should be made after careful consideration of the information disclosed in the prospectus (or prospectuses). To figure out how the costs of a mutual fund add up over time and to compare the costs of different mutual funds, you should use amutual fund cost calculator.
Mutual fund classes are regulated primarily under the Investment Company Act of 1940 and the rules and registration forms adopted under that Act,in particular Rule 18f-3.
For more information on this topic, please read FINRA's "investor alert" concerning Class B shares.
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The thought is based on Class A and Class B comparison. I think one possible and easy explanation would be like, I treat one fund with a pre-defined fixed proportion in this portfolio according to some quantity/quality analysis (That's why I go for class B). After that, according to certain info, I think this fund is also good to hold for a short run then I go a bit more with Class A. In reality, this issue would be much more complicated.
Anyway, this simple example might be an easy way to understand such investment position situation.
2016-07-20: for the portfolio I detected, I think it's likely the fund manager tries to avoid currency translation loss. So when he receives investments in EUR and USD, he just bought local target underlying fund at different share class level...