C1T3L2 · Revised 2026-10-26

Decision and objectives

Practical task: Rebuild a small fund valuation ledger

Objectives: Reconcile portfolio value with net asset value; Calculate per-unit value without confusing subscriptions with performance; Explain valuation marks and unpriced risks.

Required prior knowledge: C1T3L1. Classification: domestic. Revision: 2026-10-26. All fictional names, prices, rates, fees, calendars and tax schedules below are hypothetical unless explicitly identified as a dated document observation.

A larger fund is not necessarily a better-performing fund. Subscriptions can increase total assets while leaving each unit unchanged. Reconcile three quantities: the marked value of holdings, the fund's assets less liabilities and the number of units entitled to that net value. This is the foundation for reading performance data and expense statements.

Mechanics

Portfolio value is the marked value of investments under the applicable valuation policy. Net asset value (NAV) adds other assets and receivables and subtracts liabilities, including accrued expenses. Unit price equals NAV divided by units outstanding. Accrual means recognizing income earned or an expense incurred before cash is received or paid. A cash balance alone therefore cannot explain unit value.

The valuation policy identifies sources for traded prices, exchange rates, accrued income and assets with limited observable trading. A mark is a valuation under that policy, not necessarily the amount obtainable immediately for the whole position. Fair-value uncertainty can be small in normal conditions and material under stress.

Price and return drivers

NAV = investment values + cash + receivables − liabilities. Per-unit value = NAV / units. With subscriptions at a correctly determined unit price and no other changes, new units equal cash subscribed / price; total NAV and units rise together. The per-unit price does not rise just because new investors arrive. If dealing or trading costs are charged to the fund, they can change that simple result; the documents determine who bears them.

Worked case

Hypothetical closing ledger: securities TRY 4,800,000; cash TRY 300,000; accrued income receivable TRY 40,000; management/custody/other accrued expenses TRY 30,000; other liabilities TRY 10,000. NAV = 4,800,000 + 300,000 + 40,000 − 30,000 − 10,000 = TRY 5,100,000. With 500,000 units, price is TRY 10.20.

A TRY 102,000 subscription at that price creates 10,000 units. Under the no-extra-cost assumption, NAV becomes TRY 5,202,000 and units 510,000; price remains TRY 10.20. A news report that the fund “grew 2%” refers here to size, not investment return. Income receivable has already entered value; when it later becomes cash, do not recognize the same income twice.

Adverse case

A previously marked security suffers a TRY 150,000 valuation reduction and a further TRY 5,000 expense accrues. Before the subscription in the preceding example, stressed NAV is TRY 4,945,000 and price TRY 9.89. A holder of 2,000 units sees value fall from TRY 20,400 to TRY 19,780, a TRY 620 decline. If the market is closed, the next valid dealing price may differ from an earlier indicative screen. Stable-looking marks are not proof that economically risky assets cannot fall.

Practical use

For an ordinary Turkish fund, retrieve its valuation-policy disclosure, prospectus and current financial/portfolio reports. TI1's prospectus section V illustrates where the NAV definition and unit-value process appear; do not generalize its pricing frequency to restricted funds. Purchase/redemption uses the fund's actual pricing and settlement rules. Fund liabilities already deducted from NAV must not be charged again to the investor's performance calculation. Investor commissions and applicable taxes remain separate. This numerical ledger excludes investor-level tax to isolate valuation; C1T2L3 supplies a full-cost comparison.

Decision boundaries

Use the NAV reconciliation to test whether price changes are consistent with assets and liabilities. It does not independently prove that every valuation input is executable or accurate. Ask about stale marks, foreign-market closures, estimated receivables and expense accruals. Defer a comparison if one fund's NAV is from a materially different time or its outstanding-unit count is unknown. A low unit price does not make a fund cheap relative to another fund with a high unit price.

Practice and references

Exercise: hypothetical securities TRY 2,400,000, cash TRY 100,000, receivables TRY 25,000, liabilities TRY 45,000 and 200,000 units. Answer: NAV TRY 2,480,000; unit TRY 12.40. A TRY 62,000 subscription creates 5,000 units, producing NAV TRY 2,542,000 and 205,000 units, still TRY 12.40 per unit. Explain why counting the subscription as return would distort performance.

Takeaway: performance belongs to the unit-value change; subscriptions explain size changes.

Reference guide: mutual-fund; net-asset-value; net-asset-value; valuation; accrual. Next: C1T3L3. Topic test.

Sources: SPK Communique III-52.1 — Articles 3–6, 14–15, 24–27; Annexes 2–3; date 2013-07-09; consolidated text lists amendments through 2024-03-01; checked 2026-10-26; TI1 prospectus attached to KAP notification 1662920 — Sections I–III; IV asset separation; V valuation; VI dealing; VII expenses; VIII taxation; IX disclosure; date 2026-09-15 notification; checked 2026-10-26. Source records: sources.json. Check the cited rule dates and confirm current dealing terms before any transaction.

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