Capital Group, one of the world’s largest money management firms, has deployed Bloomberg Valuation Service (BVAL) solution to benchmark and corroborate end-of-day values of its municipal bond positions.
The Bloomberg Valuation Service provides end-of-day valuations and risk measurements for a range of OTC derivatives and structured products including a broad coverage of municipal bonds. In addition, it offers pricing for derivatives and structured notes across foreign exchange, interest rate, inflation credit, equity, and commodity markets using data and market standard quantitative models.
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Bloomberg says that its BVAL solution is staffed by financial engineers and taps a wealth of sources to produce valuations for more than 2.5 million fixed income securities and OTC derivatives 24 hours a day, seven days a week. The system, which can also be integrated with analysis tools on the Bloomberg Professional Service, tracks current market conditions and consistently stand-up to rigid quality tests by reviewing a number of characteristics ranging from issuer, call protection and coupon-size among other factors.
Wealth of data sources
Los Angeles-based Capital Group is the vast US asset manager, with $1.4 trillion in assets under management as of December 2016. But the employee-owned firm, which dates to 1931, often has been slower than competitors to react to the shifting demands of investors. This is why the asset manager has decided to tap BVAL which today prices nearly one million municipal bonds daily and simplifies comparisons for thinly traded instruments. The solution is also the primary pricing source for the Bloomberg Barclays municipal bond indices, which are widely recognized industry benchmarks.
Noelle Aiello, VP in Global Securities Operations at Capital Group commented: “Capital Group maintains a disciplined approach to managing our funds that is based on rigorous research and high-conviction investment strategies. It is imperative that we have access to best-in-class solutions for valuing municipal bonds and BVAL offers the level of quality and service that we require.”
Varun Pawar, global head of Bloomberg’s evaluated pricing service added: “We have made strategic investments in the quality and coverage of our evaluated pricing because we recognized early on the vital role valuations play in a firm’s investment strategy and regulatory compliance process. BVAL uses rigorous and transparent pricing models that draw from a wealth of data sources. This helps our customers remain competitive in the market but also confident about meeting regulatory and investor demands.”