What does marked-to-market mean?

Marked-to-market refers to the accounting practice of valuing assets based on their current market price rather than historical costs or other methods. This approach provides a more accurate and up-to-date reflection of an asset's worth, as it takes into account fluctuations in market conditions, demand, and economic factors. In the context of investments, such as those held in Unit Investment Trust Funds, it ensures that the reported value represents what investors would realistically receive if they were to sell those assets in the market today.

Using market prices allows for transparency and relevance in financial reporting, which is particularly important for investors who need to assess the current value of their holdings to make informed decisions. The adoption of marked-to-market accounting helps to align financial statements with actual market conditions, thus improving the quality of financial information available to stakeholders.