Trade flows in US fixed income driven by analytics, algos and AI - report

Source: Greenwich Associates

U.S. fixed-income dealers are investing heavily to meet investor demand for electronic trading. But the nature of that demand is changing. Institutional investors today aren’t just looking for electronic execution. Instead, they are looking to partner with dealers who have the best pre- and post-trade analytics, deepest data, and advanced electronic tools.

All of the 2019 Greenwich Leaders in U.S. Fixed Income have continued investing in their electronic offerings with the features and capabilities required to meet those changing needs and attract institutional trading volumes. In Overall U.S. Fixed–Income Market Share, Citi takes the top spot followed by a three-way tie among Goldman Sachs, J.P. Morgan and Morgan Stanley, with Bank of America Securities rounding out the list. The 2019 Greenwich Quality Leaders in U.S. Fixed Income are Bank of America Securities, Citi and J.P. Morgan.

These dealers know that electronic infrastructure is becoming an evermore important factor in the competition for U.S. fixed-income trading business. In the months covered in the Greenwich Associates 2019 U.S. Fixed-Income Investors Study, the proportion of secondary investment-grade credit volume trading over e-channels was in the 25-28% range, while high yield hovered in the low teens, according to Greenwich Associates.

“Numerous factors are contributing to this growth, including the ongoing increase in ETF trading volumes as well as more odd-lot trading resulting from the broader trend toward index investing,” says Greenwich Associates Managing Director Frank Feenstra. “E-trading in emerging-markets rates and credit, and in short-term fixed income, also increased year-over-year.”

2019 Most Helpful Analysts and Traders in U.S. Fixed Income

The growth of e-trading and the more recent emergence of data analytics, AI and other electronic tools as core business imperatives for investors have together elevated the importance of dealers’ electronic offerings. However, as sell-side investment in e-tools grows, top-caliber traders and analysts can help dealers differentiate themselves from the competition.
“In an electronic age, a personal connection created by a trader visit can be the thing that gets a dealer the first call,” says Greenwich Associates Managing Director James Borger.  

Comments: (0)

Find out more
Featured job
All Jobs »
London, UK

Sales Director, Private Equity Solutions (London, UK)

Competitive base, double ote, benefits, stock options

22 Jul