What Really Happens Inside a Fund After Market Close: The Complete T-Day NAV Production Process from 15:00 to Midnight

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Every evening, millions of investors open their fund applications and see:

Today's NAV:

1.3526

Daily Return:

+0.82%

Many people assume:

The market closes at 15:00, the fund company calculates the price, and the NAV is published.

In reality, this is only the beginning.

After the market closes, fund companies enter one of the busiest periods of the day.

Because:

The end of trading only determines asset prices. NAV production has just started.

The complete process:

15:00

Market Close

↓

15:00-17:00

Market Data and Position Collection

↓

17:00-20:00

Asset Valuation

↓

20:00-22:00

Fund Accounting

↓

22:00-24:00

Custodian Verification

↓

Around Midnight

NAV Publication

1. 15:00: Trading Ends, But Fund Systems Start Working

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At 15:00:

Shanghai Stock Exchange:

Trading Closed

Shenzhen Stock Exchange:

Trading Closed

Stock prices are fixed.

However, fund companies cannot immediately calculate NAV.

Because funds do not only hold stocks.

They may hold:

Equities

Bonds

Money Market Instruments

Bank Deposits

ETFs

Convertible Bonds

Index Futures

Overseas Assets

Each asset class has different data sources and valuation methods.

2. First Step After 15:00: Collect Market Data

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The valuation system begins collecting prices.

Data flow:

Exchange Market Data

↓

Market Data Gateway

↓

Fund Valuation System

Equity Market Data

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The system receives:

Security Code

Closing Price

Trading Volume

Suspension Status

Price Limit Status

Example:

The fund owns:

Kweichow Moutai

1 million shares

Market data:

Closing Price:

1,500 RMB

Valuation:

1 million × 1,500

=

1.5 billion RMB

Bond Market Data

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Bond valuation is much more complicated.

Example:

A fund owns:

Corporate Bond

1 billion RMB face value

But there was no transaction today.

What price should be used?

The system uses:

ChinaBond Valuation

China Securities Index Valuation

Pricing Models

Example:

Theoretical Bond Price:

101.25 RMB

3. 15:30-17:30: Position Freeze

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The valuation system needs to know:

What assets does the fund actually own today?

Data comes from:

Trading System

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Example:

Bought today:

Stock A

500,000 shares

Sold today:

Stock B

200,000 shares

Portfolio Management System

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Creates:

Final T-Day Position

Example:

Fund holdings:

Stock A

1 million shares


Bond B

50 million RMB


Cash

100 million RMB

Data flow:

Trading System

↓

Portfolio Management System

↓

Valuation System

4. Around 18:00: Valuation Batch Processing Starts

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This is the core stage.

The valuation engine launches:

Valuation Batch Job

Similar to overnight batch processing in banking systems.

Input:

Asset Positions

+

Market Prices

+

Valuation Rules

Output:

Market Value of Each Asset

Example:

Stock:

1 million shares

×

20 RMB

=

20 million RMB

Bond:

Principal

+

Accrued Interest

+

Valuation Adjustment

Cash:

Deposit Balance

+

Interest Income

The system generates:

Fund Asset Summary

Example:

Equities:

5 billion RMB

Bonds:

2 billion RMB

Cash:

500 million RMB


Total Assets:

7.5 billion RMB

5. The Hardest Part: Handling Valuation Exceptions

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Real markets are never perfect.

Every day there are exceptions.

5.1 Suspended Stocks

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Problem:

No closing price exists.

The system applies:

Index Adjustment Method

Industry Comparison

Historical Price Adjustment

Manual Review

5.2 Bonds Without Trading

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Uses:

ChinaBond Valuation

Yield Curve Model

Credit Adjustment

5.3 Incorrect Trading Data

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Example:

Trading system:

Bought 1 million shares

Valuation system:

Position Missing

Requires:

Manual Investigation

6. Around 20:00: Fund Accounting Takes Over

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The valuation system calculates:

Asset Value

But this is not yet NAV.

The result enters:

Fund Accounting System

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The accounting system handles:

Fair Value Changes

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Example:

Stock price increases:

+10 million RMB

Accounting entry:

Fair Value Gain

+10 million RMB

Accrued Expenses

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Daily calculation:

Management Fee

Custody Fee

Distribution Fee

Example:

Daily Management Fee:

100,000 RMB

Interest Accrual

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For bonds:

Daily Accrued Interest

Even if cash has not been received.

The system generates:

Fund Balance Sheet

7. NAV Calculation

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Formula:

Unit NAV

=

Net Fund Assets

÷

Total Fund Units

Example:

Assets:

10 billion RMB

Liabilities:

100 million RMB

Net assets:

9.9 billion RMB

Fund units:

8 billion units

NAV:

1.2375 RMB

8. After 22:00: Custodian Bank Verification

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A fund company cannot publish NAV independently.

The process:

Fund Company

↓

Custodian Bank

The custodian bank has an independent verification system.

9. What Does the Custodian Check?

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9.1 Position Verification

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Fund company:

Stock A:

1 million shares

Custodian:

Securities Account:

1 million shares

Must match.

9.2 Cash Verification

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Fund company:

Cash:

500 million RMB

Custodian account:

500 million RMB

Must match.

9.3 Price Verification

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Fund valuation:

Stock A:

20 RMB

Custodian checks:

Exchange Closing Price:

20 RMB

9.4 Accounting Verification

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Checks:

Fees

Income

NAV Formula

Accounting Entries

Final process:

Custodian Approval

↓

NAV Publication

10. Why Do Custodian Banks Often Work Late?

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Because:

The fund company can only finish:

Valuation

Accounting

NAV Calculation

after market close.

Only then can the custodian verify.

Complete chain:

Fund Company

20:00

Generates NAV


↓

Custodian Bank

22:00

Reviews NAV


↓

Approval


↓

Publication

11. When Does the TA System Participate?

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Many people misunderstand:

Does the TA system calculate NAV?

No.

TA means:

Transfer Agent

Its main responsibility:

Fund Share Registration

Example:

Investor buys:

10,000 fund units

TA records:

Investor A

10,000 units of Fund X

NAV comes from:

Valuation System

Ownership comes from:

TA System

Together:

Investor Asset Value

=

Fund Units

×

NAV

12. Complete T-Day Night Data Flow

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15:00

Exchange Market Close

        ↓

Market Data Collection

        ↓

Trading System Freezes Transactions

        ↓

Portfolio System Generates Positions

        ↓

Valuation Engine Calculates Asset Values

        ↓

Fund Accounting Creates Financial Records

        ↓

NAV Calculation

        ↓

Send to Custodian Bank

        ↓

Custodian Verification

        ↓

TA System Updates Unit Value

        ↓

Fund Distribution System Publishes

        ↓

Investor Views NAV

13. Why Is NAV Production a Difficult Financial IT Problem?

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Because it requires:

High Accuracy

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A small error:

1.3526

↓

1.3528

looks insignificant.

But for a fund with tens of billions RMB:

The impact is huge.

High Consistency

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Multiple systems must agree:

Trading System

Position System

Valuation System

Accounting System

TA System

Custodian System

Tight Time Window

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Every trading day:

15:00 Start

↓

Before Midnight Finish

14. From a Securities IT Perspective

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Fund NAV is not just a number.

It is a production pipeline:

Market Data

↓

Asset Positions

↓

Valuation Rules

↓

Valuation Engine

↓

Accounting

↓

Custodian Supervision

↓

NAV Publication

The investor only sees:

1.3526

Behind it may involve:

• Dozens of systems
• Hundreds of database tables
• Millions of asset records
• Multiple institutions working overnight

Conclusion

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Daily NAV generation is essentially a financial IT end-of-day settlement process.

At 15:00:

The market closes.

But:

The fund company’s most important work begins.

The complete workflow:

Trading Ends

↓

Data Collection

↓

Asset Valuation

↓

Accounting Recognition

↓

Custodian Verification

↓

NAV Publication

This is the daily:

“T-Day NAV Production Pipeline”

that powers modern asset management.