Fund Valuations Can Be a Moving Target

Northern Trust Discusses New NAV Solutions

May 3, 2010

One of the most challenging aspects of the credit crisis is the need to revise historical processes to validate security prices. A common industry practice is for administrators to test the propriety of prices by performing vendor comparisons and examining variations outside of typical percentage thresholds. However, where substantial variation in valuations among pricing vendors for fixed income securities exists, particularly those with low trading volumes, it is virtually impossible to complete vendor price comparisons using historical tolerances.

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