Interactive Data Corporation (NYSE: IDC), a leading provider of financial market data, analytics and related services, today announced that its Pricing and Reference Data business now offers a Fair Value Information Service that covers international equity index futures as well as international exchange-listed and over-the-counter (OTC) equity options.
This service can help institutions meet their fair value requirements for portfolios that contain these financial instruments.
U.S. mutual funds have increasingly been incorporating international equity derivatives into their portfolios in an effort to seek alpha for their investors or for other purposes.* These fund complexes and their shareholders can benefit from Interactive Data's Fair Value Information Service, which funds can use to help them determine end-of-day valuations for international equity index futures and international equity options when market quotations are not readily available at the time of net asset value (NAV) calculation.
"As mutual funds broaden their strategies to include more complex investments such as international futures and options, there is a greater need for a systematic approach to producing valuations that reflect global market movements," said Shant Harootunian, managing director of Evaluated Services, Interactive Data Pricing and Reference Data. "Recent research performed by Interactive Data revealed that approximately 93% of mutual funds employ a systematic fair value methodology for international equities. Interactive Data's introduction of such a service for international equity derivatives is a natural progression for the industry. Today's announcement demonstrates our commitment to providing clients with innovative offerings that help them to address continually changing market requirements."
Currently, more than 160 fund complexes subscribe to the Fair Value Information Service. In 2007, Interactive Data was awarded a patent by the U.S. Patent and Trademark Office for Fair-Value Pricing of a Financial Asset. Additional information about the Fair Value Information Service is available at www.interactivedata-prd.com.
Interactive Data also offers a Fair Value Information Service for international equities that provides information that can be used to estimate the value of international equuity securities after the close of trading in local markets. It utilizes a variety of observable market inputs and a multifactor model to produce evaluations.
* According to Interactive Data's research of quarterly filings with the SEC on form N-Q, the number of international equity index futures and options held by funds has steadily increased since 2005.