In short, in the time between the order is placed and the order is traded the markets can move slightly. We leave a small buffer to account for those potential price changes.
This small buffer is called fractional dealing residual cash and is one of many ways we ensure that your transactions get settled smoothly.
This buffer is around 0.5% and is applied to your initial orders. This is because our dealing process involves all client orders being aggregated, a quoted price taken from the market, the orders being created with the latest price and then the orders being executed. In the time between us obtaining the prices and us executing the orders, the ETF price will have moved marginally. Therefore we use this cash buffer to ensure we do not overbuy the ETF should the price increase.
The fractional dealing residual cash is later invested to make sure that every penny is put to work in your portfolio.