|
|
Closed-End Funds
|
|
||
Re: NAV - Here's the Cause From Barron's Online:
More Oddness In Funds: Pricing Glitch Hits NAV CalculationsBy Chris DieterichMore headaches for the funds industry. A technical malfunction at Bank of New York Mellon is hitting the pricing mechanism that calculates and disseminates net asset values for some mutual and exchange-traded funds. The Wall Street Journal is reporting that Bank of New York, which serves as a custodian for fund companies, started having trouble with its SunGard Data pricing system earlier this week. It’s not clear how many funds or fund companies are affected, but some firms have been posting adjustments throughout the day: First Trust, for one, announced that NAVs for four ETFs contained errors of more than 1%; Guggenheim announced early on Wednesday that three ETF NAVs contained errors of the same magnitude. Deutsche Asset & Wealth Management made adjustments to five ETFs. Federated Investors, Prudential Financial and Voya Investment Management funds were also impacted, according to the Journal. The Journal notes, and a few calls by Barron’s to market making firms confirm, that this issue seems to be unrelated to the huge swings seen across financial markets this week. On Monday, a swift decline for stocks resulted in dislocations between ETF prices and NAVs. ETFs rely on real-time information about the securities they hold in order to function. Without an accurate NAV, it becomes more difficult for market makers to keep ETF prices aligned with the values of their holdings, market participants said. Too be sure, this is mostly a headache for the trading community, but the issue could potentially be a problem for investors should market makers compensate for the unknown by widening bid-ask spreads.
|
return to message board, top of board |