Bond market operator MarketAxess has added new portfolio trading functionality to its platform, to better integrate with a full suite of trading solutions.
The MarketAxess portfolio trading solution now includes support for multi-directional lists and multi-currency lists, designed to sit alongside existing list request-for-quote (RFQ) functionality. These should give clients a streamlined workflow to efficiently execute single, list and portfolio trades according to their preferred strategy.
Integrated net-spotting capabilities are also available through MarketAxess’ trading protocols, including portfolio trading, backed by pricing available via the MarketAxess Rates marketplace, formerly LiquidityEdge.
MarketAxess estimates that portfolio trading today accounts for a small but growing portion of the US credit market, reportedly reaching approximately US$1.5 billion in average daily volume (ADV), or an estimated 3.8% of US investment grade (IG) and US high yield (HY) TRACE volume. Since the recent technology release in late-May, more than 50 portfolio trades have been completed on MarketAxess with 17 unique investor firms and nine dealers.
“We’ve seen a steady but important increase in client adoption of portfolio trading since enhancing our service,” commented Kevin McPherson, global head of sales with MarketAxess. “Certainty of execution across a broad basket of instruments has become more important to our clients, particularly at the illiquid end of the spectrum. We’ve enhanced both our pricing data and our portfolio trading tools to provide a complete set of efficient tools to address clients’ execution objectives.”
Paul Glezer, who leads JP Morgan's North American Portfolio Trading team commented, “JP Morgan continues to see rapid growth in its portfolio trading business globally. Clients benefit from additional avenues of interaction with dealers when looking to leverage the liquidity tool that portfolio trading has become. Additionally, high quality data and workflow efficiency for both the buy-side and sell-side continues to be the main drivers in this space.”
Andrew Ruskulis, director in the Global Fixed Income team at MacKay Shields, added, "Efficiency and certainty of execution are two critical factors driving the demand for portfolio trading. Technology that improves the likelihood of execution through more dynamic workflows and combines deep liquidity with the use of benchmark pricing, such as Composite+ (CP+), to confidently execute complicated lists is in our view a game changer."
MarketAxess’ portfolio trading solution reportedly provides execution for up to 1,800 list items. It incorporates the firm’s AI-powered Composite+ benchmark pricing that provides real-time pricing content at the individual bond and portfolio level. Analytics are available allowing traders to determine execution potential on the portfolio.
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