Scotia Securities Inc. today announced that it has expanded its use of fair value pricing to actively value international securities held in its mutual funds.
Fair value pricing is a process to determine the fair price of securities in a fund’s portfolio in situations where market prices are not available, not reliable, or not reflective of the security’s market value.
The method has been adopted by a number of leading mutual fund companies and can mitigate the potential negative effects of so-called “market timing” trades. Market timing can potentially reduce gains earned by long-term investors and increase mutual fund transaction costs.
SSI has engaged the services of Investment Technology Group, Inc. (ITG), a leading provider of technology-based equity trading services and transaction research. The ITG Fair Value Model helps mutual funds establish fair value prices for portfolio securities. The model provides mutual funds with an objective method of valuing foreign securities after foreign markets close and before the net asset value is calculated. The ITG Fair Value Model creates fair value adjustment factors for a universe of over 45,000 stocks in 49 markets outside the U.S. by 4:30 p.m. ET on each trading day.
“This new functionality will allow SSI to further protect the interests of investors and help them to reach their long term financial goals,” said Karen Fisher, managing director and head, retail investments, Scotiabank, in a release.
Scotia Securities expands fair value pricing model
ITG to value foreign securities in Scotia mutual funds
- By: IE Staff
- November 7, 2005 November 7, 2005
- 10:30