The value of your investment can go up or down, and you may get back less than you invested. Nothing in this article is investment, tax or legal advice. |
A split or consolidation changes the number of units you own and their price per unit. The adjustment itself leaves the value of your investment unchanged. Your investment can still rise or fall with market movements.
Mutual funds are available to UK residents only and are being rolled out gradually, so they may not be available to you yet. If you're eligible but don't have access yet, you can join the waitlist in the app and we'll let you know when access becomes available to you.
Why might a fund do this?
A fund manager may use a split or consolidation to bring the price per unit to a more practical level.
The examples below assume no market movement or rounding adjustment.
What is a split?
A split increases the number of units you hold and reduces the price of each unit proportionally.
💡 Example
You hold 100 units of Fund A worth £10 each, giving you an investment of £1,000. The fund declares a 2-for-1 split.
As a result, you will now own 200 units worth £5 each. Your investment is still worth £1,000.
How do my average price, total cost and return change?
Your average purchase price per unit adjusts in the same proportion as the fund's price per unit. A 2-for-1 split halves your average purchase price. A 1-for-5 consolidation multiplies it by five.
Your total purchase cost remains unchanged. The split or consolidation itself also leaves your return unchanged, both as an amount and as a percentage.
What is a consolidation?
A consolidation combines units into fewer units, increasing the price of each unit proportionally. It is also called a reverse split.
💡 Example
You hold 200 units worth £5 each, giving you an investment of £1,000.
If every 5 units become 1, you hold 40 units worth £25 each. Your investment is still worth £1,000.
How are fractional units affected?
The same ratio applies to fractional units:
- A 2-for-1 split turns 0.5 units into 1 unit.
- A 1-for-5 consolidation turns 0.5 units into 0.1 units.
Your final quantity is subject to the fund's rounding rules.
How are distributions affected?
The split or consolidation itself does not change the total distribution amount you receive. The amount paid per unit adjusts to reflect the change in the number of units entitled to the payment.
💡 Example
A payment of £0.20 per unit on 100 units is equivalent to £0.10 per unit on 200 units after a 2-for-1 split. You receive £20 in either case.
What happens to pending orders?
When a fund undergoes a split or consolidation, we'll automatically cancel any pending orders for that fund that haven't yet been sent to it. We'll release any cash reserved for those orders and notify you of the cancellation.
Orders already sent to the fund will be processed by the fund.
Will I be notified?
Yes, we will notify you via a trading notice on the fund page and after the split or consolidation has been processed on your account.
Can I buy, sell or transfer units during a split or consolidation?
You may not be able to buy, sell or transfer units in the affected fund for a short period while the split or consolidation is being processed.