Imperfect bond data and the need to analyse it is significantly reducing a trader’s ability to decide quickly on whether to execute a bond trade, according to buy-siders.
A panel at the Fixed Income Leaders Summit event in Boston this week discussed what is needed to form a successful fixed income trading desk.
They agreed the holes in bond data are preventing traders from being ‘opportunistic’ when executing trades.
Zack Ellison, director of US public fixed income at Sun Life Asset Management explained to delegates that when looking at bond execution, immediacy is key.
Ellison pointed out to delegates that banks with their own fixed income indices are “wasting valuable time”.
He said: “The biggest problem is bad data. If the data can get cleaner and your best people are not spending their time analysing that data, you can then think of the bigger picture.
“Banks have their own fixed income indices and it’s a waste of time. Why don’t we just have one?”
Panellist Irina Isaakova, vice president and director at TD Asset Management said: “Traders are not dealing with perfect information, so focus and attention to detail is needed to analyse the information and make decisions.”
Isaakova added that human capital and strong skill-sets are imperative to preserving the ability to make quick decisions with the imperfect data.
She explained: “I want to make sure I have the right people with the right skill-sets for their roles. I strongly believe in specialisation and retaining a diverse trading team who can provide different perspectives.”
The panel agreed technology can sometimes help, but John Adams, global head of product strategy at Portware pointed out there is “room for innovation but not proliferation” in the fixed income initiative market.