Mutual Funds

Mutual funds are professionally managed investments that group investors' money, to invest in a Securities Portfolio, like stocks or bonds. When you invest in a mutual fund, you're buying a share of the fund, equal to a portion of ownership in its holdings. As the fund's total value changes over time, the value of your investment also goes up or down. If the underlying stocks or bonds pay dividends or income, you receive that too.

Mutual Fund dividends are taxed as ordinary income, and capital distributions as either short-term or long-term gains, depending on how long the mutual fund has held the underlying investment.

DriveWealth offers our Partners the ability to transact in mutual funds both in the sandbox and production environments. The following are DriveWealth’s internal rules for executing orders in mutual funds:

• All orders are required to be submitted in NOTIONAL amounts, meaning that a mutual fund order has to be sent in terms of dollars
• Orders must be submitted prior to 1:00pm ET for same day execution. Any order received after this time will be placed for execution the following day
• Net Asset Values (NAV’s) are generally posted between 5:00pm-7:30pm ET, which is required to trigger an order stats update to “successful”
• Funds or positions that are a result of a buy/sell settle T+1, and will reflect as such in the account summary API
• There is no current mechanism in place to correct a trade that may have failed for same day execution. Meaning that if a same day trade was placed and subsequently failed at 5:30pm ET it is not possible to revise for another same day trade.

Fund-Specific Requirements

Certain mutual funds have specific restrictions or requirements. It is important to understand these constraints before selecting which mutual funds to make available in your offering.

• Required minimum investment amounts (e.g. $1,000 or $5,000 minimum threshold)
• Only specific account types can transact in the funds

Sandbox Testing

To begin testing mutual funds in the sandbox environment reach out to your Partner Solutions Representative with the tickers of the funds you want to be enabled. When in the sandbox environment if the account you would like to test trading mutual funds on is currently toggled to ignoreMarketHoursForTest : true, all mutual fund orders will fail. Please ensure this toggle is set to false if you are testing mutual fund trading in the sandbox environment.

Market Data

Mutual Fund prices show the net asset value (NAV) of the fund at the end of market day. The NAV does not update intraday, so there is no need to continually pull this endpoint to retrieve the most up-to-date NAV. Market data displays the prior day’s NAV, and can be generated through any of our 3 market data APIs found in the Market Data section of this document.