MarketAxess expands protocols for portfolio trading to streamline workflows

Multi-directional and multi-currency lists will be supported for portfolio trading at MarketAxess as protocol continues to grow in fixed income.

Fixed income platform provider MarketAxess has added new functionality to its portfolio trading solution to streamline workflow for clients executing single, list and portfolio trades.

The additions include support for multi-directional and multi-currency lists that sit alongside request for quote (RFQ) protocol. Integrated net spotting capabilities have also been added for portfolio trading with pricing via the MarketAxess Rates marketplace.

MarketAxess said more than 50 portfolio trades have been completed on its platform with 17 investor firms and nine dealers since a technology release in May. The firm provides trading for up to 1,800 list items alongside real-time bond pricing and analytics through its Composite+ AI engine.

“Certainty of execution across a broad basket of instruments has become more important to our clients, particularly at the illiquid end of the spectrum,” said Kevin McPherson, global head of sales at MarketAxess. “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.”

Portfolio trading allows traders to package multiple bonds into a basket for execution as a single transition. It accounts for a small proportion of the US credit market with roughly $1.5 billion in average daily volume, which continues to grow.

Trading venues and platforms have been increasingly supporting portfolio trading in credit markets amid the surge in demand from institutional traders to manage large and complex bond transactions in a more electronic market.

“JP Morgan continues to see rapid growth in its portfolio trading business globally,” Paul Glezer, head of JP Morgan’s US portfolio trading team, commented on the MarketAxess expansion. “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.”

JP Morgan reported a significant uptake in buy-side clients in the US leveraging portfolio trading last year, with the bank’s credit trading desk seeing a 141% increase in portfolio trading volumes compared to the year prior.