Tradeweb has sought to meet rising demand for passive investment strategies at the Close with the expansion of its portfolio trading offering to include a Trade at Close functionality.
Tradeweb said the expanded remit was in response to the growing passive investment and bond exchange traded funds (ETFs) market alongside rapidly increasing volumes taking place at the Close.
Through the expansion, Tradeweb’s clients in the US and Europe can electronically execute portfolio trades at the close using end-of-day prices, to maximise efficiency in the critical final minutes of the trading day.
The fixed income platform provider began rolling out its Trade at Close functionality in July earlier this year and claimed to have facilitated $1.4 billion in trading by the end of September.
Passive funds tend to typically trade at the end of day to minimise any tracking errors to underlying benchmarks while investors balancing portfolios or seeding new funds also utilise liquidity at this time to limit volatility exposure.
Tradeweb said this new solution would cater for both customer types, also giving them straight-through-processing.
“As passive investment trends fuel interest in fixed income ETFs, the ability to electronically trade a portfolio of bonds at a single closing price has never been more important,” said Chris Bruner, managing director and head of US institutional fixed income at Tradeweb.
“Portfolio trading provides clients with surety of execution, the ability to transfer very significant risk, and protection from information leakage, and expanding its functionality further to incorporate end-of-day trading will help more of our clients digitise some of their largest trades.”
Volumes at the Close have continued to increase as this period of the day becomes increasingly popular for those wishing to minimise their market impact.
Several venues have sought to capitalise on this demand with close related product launches, including Turquoise Plato which launched its ‘Trade At Last’ closing auction mechanism at the end of last year.