Derivative instrument and Low-volatility NAV: Difference between pages

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imported>Doug Williamson
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A derivative instrument or contract is one whose value and other characteristics are derived from those of another asset or instrument (sometimes known as the Underlying Asset).
''Money market funds''.


Derivative instruments are widely used by non-financial corporates for hedging purposes.
Low-volatility Net Asset Value.




<span style="color:#4B0082">'''Example'''</span>
<span style="color:#4B0082">'''''Money market fund (MMF) reforms'''''</span>


A share option is a type of derivative contract, allowing the holder to buy shares at a certain predetermined strike price.
:"Full implementation of MMF reforms won't take place until February 2019, but treasurers need to start preparing for the replacement of constant net asset value (CNAV) funds with two new categories:


The value of the share option derives from the current price of the related underlying share relative to the option strike price.
: - the Public Debt CNAV fund, and


: - the low-volatility NAV (LNAV) fund.


== See also ==
* [[CertFMM]]
* [[Commodity risk]]
* [[CP]]
* [[Embedded derivative]]
* [[ETD]]
* [[FC]]
* [[Fixing instrument]]
* [[Hedge fund]]
* [[Hedging]]
* [[IR]]
* [[Maturity]]
* [[Notional principal]]
* [[Option]]
* [[Outright]]
* [[Strike price]]
* [[Tracker fund]]
* [[Transfer]]
* [[Underlying]]
* [[Underlying asset]]
* [[Underlying price]]
* [[XVA]]


:According to research from rating agency Moody's, LVNAV MMFs are likely to attract most of the funds currently invested in prime CNAV MMFs."


===Other links===
:''The Treasurer magazine, June 2018, p21 - Sarah Rundell, freelance journalist specialising in treasury and investment issues.''
*[http://www.treasurers.org/node/8599  Masterclass: Derivatives, The Treasurer, December 2012]


*[http://www.treasurers.org/node/7849 Use and Misuse of Derivatives, Will Spinney, ACT 2012]


[[Category:Risk_frameworks]]
== See also ==
* [[Constant net asset value]]
* [[Money market fund]]
* [[Net asset value]]
* [[Prime]]
* [[Public Debt CNAV]]
* [[Variable net asset value]]
* [[Volatility]]

Revision as of 15:57, 9 July 2018

Money market funds.

Low-volatility Net Asset Value.


Money market fund (MMF) reforms

"Full implementation of MMF reforms won't take place until February 2019, but treasurers need to start preparing for the replacement of constant net asset value (CNAV) funds with two new categories:
- the Public Debt CNAV fund, and
- the low-volatility NAV (LNAV) fund.


According to research from rating agency Moody's, LVNAV MMFs are likely to attract most of the funds currently invested in prime CNAV MMFs."
The Treasurer magazine, June 2018, p21 - Sarah Rundell, freelance journalist specialising in treasury and investment issues.


See also

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