In its response to the IOSCO consultation (November 2025) on valuation principles for open-ended funds, the AFG reiterates that rigorous valuation practices are an essential part of asset management, as they ensure that assets are correctly valued and that investors are not disadvantaged. The AFG supports IOSCO’s work to harmonize these principles.<\/p>\n\n\n\n
However, with regard to ETFs, contrary to IOSCO’s recommendation, the AFG points out that these vehicles are funds from a legal standpoint and should not be subject to methodological exceptions in their valuation. Even if they are listed on a stock exchange, ETFs can be traded over the counter and at their net asset value. For open-ended Funds of Funds, whose underlying asset is an ETF, the last available price should not be used for the valuation of the fund, as the net asset value of the ETF always represents a negotiable price on a daily basis, which may be very different from the last available price.<\/p>\n\n\n\n
The AFG also believes that open-ended funds should opt for a valuation methodology that takes into account changing market conditions (interest rates, credit spreads, etc.). This is a necessary condition for ensuring equal treatment of investors (whether they trade or remain in the fund). In limited circumstances where amortized cost method is used, the risk of mispricing the OEF must be carefully monitored with the view to ensure the fair treatment of the investors.<\/p>\n\n\n\n
Conversely, with respect to closed-ended funds, AFG believes that the amortised cost method can be considered.<\/p>\n\n\n\n