Interactive Data Corporation (NYSE: IDC), a leading provider of financial market data, analytics and related services, today announced the Basket Calculation Service(SM), a new web-based offering that is designed to provide clients with the indicative optimized portfolio value (IOPV) for equity and fixed income exchange traded funds (ETFs).
According to a report by Morgan Stanley, the ETF market has been growing in terms of assets and funds launched. As of June 30, 2007, there were more than 950 ETFs around the world with assets of more than $688 billion. Nearly 240 ETFs have been launched worldwide from the beginning of 2007 until the end of June, with hundreds more expected to be introduced before the end of the year.
In order to provide investors with a broad range of choices, ETF sponsors are offering an increasingly diverse range of ETFs, including fixed income ETFs. The Basket Calculation Service will utilize intra-day fixed income valuations from Interactive Data Pricing and Reference Data and real-time equity pricing data to calculate and deliver updated IOPVs every 15 seconds through a fully-hosted web-based application powered by PlusFeed(SM), Interactive Data Real-Time Servicesâ consolidated low latency digital datafeed.
Three ETF sponsors have signed agreements to utilize the Basket Calculation Service. The new service is currently available in North America.
Interactive Dataâs new intra-day valuations will initially cover municipal securities, with a broader range of global fixed income instruments including treasury, emerging market, sovereign and corporate securities, expected to be available by the end of October. This new capability builds upon Interactive Dataâs position as a market leader in providing fixed income evaluations to the institutional marketplace. In addition to being used as an input to the Basket Calculation Service, the intra-day valuations are expected to be offered to clients as a separate service by the end of the year.
âThe majority of ETFs launched to date have been mostly equities-based,â said Ken Starr, senior director, Interactive Data Pricing and Reference Data. âWe believe this is due in part to the challenges associated with calculating valuations of ETFs that contain thinly-traded fixed income securities. By combining Interactive Dataâs experience in producing millions of fixed income evaluations each day with our expertise in delivering a vast universe of real-time data, we have been able to develop a unique offering that is designed to meet the needs of clients who seek IOPVs for an increasingly diverse range of ETF products.â
âFor many years, Interactive Data has provided mission critical evaluations and pricing data to mutual funds and investment firms, and we believe that delivering intra-day valuations for exchange traded funds is a natural extension of this business,â said Ray DâArcy, president of sales and marketing, Interactive Data Corporation. âThis new offering demonstrates how Interactive Data is leveraging expertise and technology from across our organization to create offerings that meet the evolving needs of our clients.â
The Basket Calculation Service is being offered by Interactive Data Pricing and Reference Data, Inc. The process Interactive Data Pricing and Reference Data follows for producing intra-day fixed income valuations is different than the process utilized for creating its end-of-day fixed income evaluations. More detailed information about these processes is available to clients upon request.