Named SPDR SSGA MyIncome ETFs, the suite looks to offer investors the ability to build their own custom bond ladder portfolios to manage their respective cash flow, interest rate risk, and liquidity needs.

The suite consists of 14 actively managed target maturity ETFs with various maturity years ranging from 2026 to 2034.

“Fixed income investors have been enjoying the highest interest rates seen in decades, but many are wondering how they can protect against the potential for precarious rate fluctuations ahead,” said Anna Paglia, chief business officer at SSGA.

The SPDR SSGA MyIncome ETFs are designed to help investors build custom bond ladder portfolios to manage interest rate risks, cash flows, and liquidity needs. The suite is made up of both corporate bond and municipal bond ETFs.

The nine corporate bond ETFs aim to maximise current income while seeking preservation of capital, while the five municipal bond ETFs look to maximise current income that is exempt from regular federal income taxes while seeking preservation of capital.

“Investors are looking for ways to balance income and stability in this rate environment, and building a bond ladder portfolio through investing in ETFs may be an efficient way to manage duration risk and cash flow to meet liquidity needs,” said SSGA.

The investment strategies of these new ETFs are designed to enable portfolio management teams to maximise yield while preserving capital through robust investment processes and risk management.

SSGA added that its active approach seeks to enhance the income profile of a target maturity ETF portfolio, while also managing for liquidity, sector, issuer concentration, and broader macro risks.

SSGA’s dedicated active fixed income portfolio management team will manage the funds.

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Vincent Hall joined Citi as an equity trader following two years at Citadel where he served in the same role. He returns to Citi after four years, having previously worked at the firm as associate vice president in emerging markets equity trading. Elsewhere in his career, Hall has also worked at BlackRock as an associate.

Edward Tilly is set to take over as chief executive of Clear Street at the end of this year. The announcement comes two months after Tilly’s appointment as president at the firm. He replaces CEO and co-founder Chris Pento. Upon his departure, Pento is set to assume an executive and partner role at White Bay, the family office of co-founder Uriel Cohen. He will remain on the board of directors at Clear Street. Since joining Clear Street Tilly has worked closely with Pento, jointly leading the firm through the next phase of growth.

Jack Boland joined Ilex Capital in a US equity trading and global equity capital markets role. He joins from Citadel where he had been serving for the last five years as an equity trader and senior associate. Prior to joining Citadel in 2019, Boland spent five years at BlackRock as an associate and later a trader and just under a year at HBK Capital Management as a trader before that. Previously in his career, he undertook several banking, capital markets, and portfolio management internships across PwC, KPMG UK, BlackRock, and Jefferies.

Elijah Ibrahim Diallo joined Magellan Capital as a multi-strategy trader, based in the UAE. He most recently served as an investment manager at ADQ and before that spent two and a half years as a senior trader and portfolio manager at Azimut. In his career, Diallo has also worked as an equity trader at Avalon Capital Markets. Previous experience also includes stints at EFG Hermes and Mubasher Financial Services.

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He joins Barclays after almost 12 years with SSGA, originally joining the firm in 2013 in a trade support role before moving into an equity and derivatives trading role in 2016.

The TRADE first reported Corbyn’s departure from SSGA in July.

Previously in his career he also spent two years at Credit Suisse, nearly four years at Citi, and one year at Barclays in various settlements and trading focused roles.

Corbyn was recognised as one of The TRADE’s Rising Stars of Trading and Execution at Leaders in Trading in 2019.

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RBC Capital Markets appointed Mitul Patel director, central bank sales, based in London. As part of the role, Patel will hold responsibility for distributing global rates product, alongside collaborating closely with global trading teams, internal partners in DCM, syndicate, and sales to execute strategy and drive growth. Patel brings more than 20 years’ industry experience to the role, primarily across rates and FX. He joins from HSBC, where he most recently he held responsibility for primary coverage on G10 rates for reserve managers and UK real money clients.

Fidelity Investments appointed Sarah Lambert senior trader, based in Boston. Lambert joins Fidelity from MFS Investment Management where she spent the last five years, most recently serving as investment officer, fixed income trader. Before joining MFS, she spent seven and a half years at BNY Mellon (now BNY). Initially during her tenure at BNY Mellon, she served as an assistant portfolio manager, fixed income. Following this, Lambert was promoted to portfolio manager, fixed income for just over five years.

Australian pension fund AustralianSuper selected one of its own to take up the reins for its dealing business. According to an update on her social media, Nina Marsh has been appointed manager of dealing at the buy-side firm after spending the last two years as a senior dealer at the firm. Prior to joining AustralianSuper – and the buy-side for the first time – in 2022, Marsh spent 14 years at Liberum as an equity sales trader and nearly nine years at Deutsche Bank in the same role.

Hong Kong Exchange and Clearing (HKEX) appointed Vicky Chan managing director, head of post-trade, effective 5 August. Chan returns to HKEX after previously serving for 15 years at the group in a range of teams including cash settlement, clearing operation and platform development. Previously in her career, Chan held roles at various companies including AIA Group, Goldman Sachs, UBS and PricewaterhouseCoopers. As part of the new role, Chan will be responsible for leading the post-trade team to further elevate HKEX’s service offering across its clearing and settlement systems, the firm confirmed.

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Boston-based McKenna joined GMO in 2004 as a pricing analyst, and most recently worked in a multi-asset trading role for 15 years.

Read more: Fireside Friday with… State Street Global Advisors’ Khursheda Fazylova

His expertise includes equities, ETFs, merger arbitrage spreads, equity swaps, futures, options, and FX.

Prior to GMO, he worked as an operations specialist at Evergreen Investments and has also previously worked in a custody-related accountancy role at Investors Banks & Trust.

Earlier this year, Rikki Corbyn left State Street Global Advisors (SSGA) following 11 and a half years with the firm, as reported by The TRADE. 

Most recently, Corbyn had served as equity and derivatives trader, vice president at SSGA, focused on the EMEA region, having joined the desk in December 2016.

State Street Global Advisors had not responded to The TRADE’s request for comment at the time of publication.

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Edward Tilly was named president at Clear Street, 10 months after he resigned as chief executive of Cboe. In the role, Tilly is set to work closely with Chris Pento, CEO of Clear Street, jointly leading the firm through the next phase of growth. Tilly resigned as chief executive of Cboe in September 2023 following the conclusion of an investigation – launched in August – that determined he had failed to disclose personal relationships with colleagues. During his time at Cboe, Tilly was a driving force behind Cboe’s acquisition of BATS Global Markets in 2017, as well as overseeing the launch of products including 0DTE options.

Flavio Paparella was named managing director within BTIG’s global emerging markets fixed income group, joining from Seaport Global Holdings where he also served as a MD focused on LATAM fixed income. In the new role, Paparella will be based in New York and is set to focus on Latin American markets, as the firm seeks to expand its presence in the area. He will report directly to Stuart Kasdin and Pablo Melasecca, co-heads of Latin America and EMEA credit emerging markets. Previously in his career, Paparella ran the institutional structured products Latin America desk for RBC Capital Markets. He also previously served as managing director at both American Express Bank International and Deutsche Bank, Argentina.

Edmond de Rothschild Asset Management appointed Regine Wiedmann as head of distribution for the DACH region. Wiedmann brings more than 18 years of experience in asset management and sales in the German-speaking markets. She initially joined Edmond de Rothschild AM in June 2021 as co-head of sales Germany and Austria, later being promoted to head of sales Germany and Austria in January 2022. Before joining Edmond de Rothschild, Wiedmann served as an executive director at Goldman Sachs Asset Management, responsible for wholesale clients in Germany. Before that, she co-founded Vicenda Asset Management in Zug, Switzerland. Elsewhere, Wiedmann was head of marketing and key account manager at the investment boutique Tiberius Asset Management, also based in Zug, Switzerland.

NatWest Group named Jonathan Peberdy chief executive of NatWest Markets, following 11 months as deputy CEO. The appointment is subject to regulatory approval. Peberdy has been with the business for 25 years and has previously served as head of capital markets. He succeeds Robert Begbie, chief executive, commercial and institutional. NatWest Markets confirmed that Robert Begbie would assume the role of chief executive permanently back in June 2020, having led the business on an interim basis since December 2019. At the time, his appointment was a key feature of the first major leadership restructure by Alison Rose, the chief executive of RBS.

GLMX appointed David Nicol as head of commercial operations. Nicol was promoted to the role after initially joining GLMX as a consultant in December last year. Previously, Nicol served as chief executive and co-founder of corporate bond trading ecosystem LedgerEdge. Before serving at LedgerEdge, Nicol spent nearly two and a half years at R3, most recently serving as a product manager. This followed a five-year stint at IBM, where he also served as a product manager.

Liquidnet appointed Jeffrey Crane head of international for the Americas, as part of the firm’s continued investment in its cross-border business. Crane brings more than two decades of experience in institutional equity trading to the role. He joins from SageTrader where he most recently served as managing director and head of sales, overseeing new business growth for domestic and international trading. Before that, Crane spent more than 20 years with Instinet where he held various positions, including managing the firm’s cross-border business as head of the international desk in New York.

Honor Woods was appointed equity trader at RBC BlueBay Asset Management, based in London. Woods has previous experience working in the institutional equity trading team at AB Bernstein.

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Most recently, he served as equity and derivatives trader, vice president at SSGA, focused on the EMEA region, having joined the desk in December 2016.

Following his departure Corbyn is set to join Barclays Capital, The TRADE understands.

Prior to his time at SSGA, Corbyn held settlement-related roles at Credit Suisse, Citigroup, and Barclays Capital.

Read more: State Street Global Advisors hires from within for new head of EMEA 

In 2019, Corbyn was one of The TRADE’s Rising Stars, recognised for his well-regarded work on the London trading desk where he specialised in developed European markets, providing coverage to the global portfolio management teams.

The TRADE’s Rising Stars initiative, recognising the budding buy-side talents of the institutional trading space, returns in October 2024, its tenth year. 

State Street Global Advisors declined to comment when approached by The TRADE.

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The agreement, which aims to move beyond cryptocurrencies and bitcoin, will see the two firms provide investors with access to the $2.4 trillion digital asset landscape through manager-directed strategies.

“We believe that the digital assets landscape is so much more than the single crypto components and that crypto native companies are best equipped to understand that ecosystem and its correlation with financial markets,” said Anna Paglia, chief business officer at State Street Global Advisors.

“We are pleased to be working with Galaxy to educate investors about the role digital assets can play in a diversified portfolio and provide the opportunity to participate in the next level of growth and innovation for the digital asset ecosystem.”

With growing interest in digital assets from both institutional and retail traders as a result of spot bitcoin ETFs, investors are also seeking exposure to the asset class through investment options beyond pure spot bitcoin.

The two firms stated that they believe this is where the next level of growth is for the digital asset ecosystem.

Read more: Digital assets and traditional finance: Can two parallel lanes converge?

“Since Galaxy was founded, active management across the full ecosystem of digital assets and crypto companies has been a core competency,” said Steve Kurz, global head of asset management at Galaxy.

“By partnering with State Street Global Advisors and utilising our combined expertise, we believe we are in a strong position to make digital assets more accessible to the broader investment community through the creation of new ETFs offering exposure to digital assets.”

According to a statement, the expectation is that State Street Bank and Trust would provide administrative and accounting services for the new digital assets ETFs that State Street Global Advisors and Galaxy jointly develop pursuant to this collaboration.

The post State Street Global Advisors and Galaxy Asset Management collaborate on new digital asset-based strategies appeared first on The TRADE.

At State Street Global Advisors, we operate in a fast-paced environment. For the desk to be successful, we all have to be comfortable navigating highly dynamic markets. One has to constantly adapt to rapidly changing conditions, make quick decisions, and execute with as minimal a footprint as possible.

Our team works in close collaboration with portfolio managers, understanding portfolio construction and the underlying benchmark (e.g. index events, new issuance, downgrades) is extremely important, as poor trading strategy can have a large drag on the performance and can add on to the ‘tracking error’. Effective communication and coordination is something that we all value and we make sure we have a clear, concise and swift exchange of information with the portfolio managers, middle office, etc.

The nature of a trading desk means significant amounts of money can be gained or lost in a matter of seconds. It’s not a secret that being pedantic, detail-oriented and resilient to stress is the key. Our decisions are data-driven, we do not only monitor the real-time data but also conduct a lot of ad-hoc and pre/post trade analysis utilising code and data-cloud technologies for example. 

State Street Global Advisors’ London fixed income desk, led by Sharon Ruffles, has received many industry recognitions (e.g. 2023 Fixed Income Desk of the Year, The TRADE) and the team’s extensive experience in the markets lays a strong foundation and environment for “green” professionals like me to learn from and grow.

What are the main topics the fixed income trading team are focused on?

Apart from constantly monitoring the macro environment around us, interest rates movements, credit spreads and credit risk, yield curves shape changes, inflation expectations, liquidity and loads more, we have to also be very aware of the changes in regulation and technological advancements. 

It’s not a secret that with the introduction of AI and big data, some parts of fixed income markets might become more efficient and we might well be moving towards a more ‘electronified’ future. However, given how fragmented fixed income markets are and how illiquid some bonds are (for example, high yield, convertible bonds, securitised, structured loans), I suspect we still won’t be able to fully outsource trading to machines in the near future. But who knows!

AI evolution is not linear to time, it’s characterised by periods of rapid advancement and innovation. The fact that the computation power is accelerating plays a critical role, if we succeed in quantum computing that might result in non-linear growth spurts.

Are you seeking the skill-sets of traders evolving?

Yes, big time. It’s hard to find anyone in my generation that is not familiar with big data, coding or hasn’t studied data science. The truth is, there will only be more and more data and one has to be able to digest it and process it fast in order to make better informed decisions in real time. 

I am very passionate about big data and coding, I code in three programming languages (Python, R, SQL) and recently have picked up BQL (Bloomberg querying language) which I use a lot within their BQuant platform.
 
What’s the best advice you’ve been given, or could give, for being effective on the desk? 

I think my advice would be to never stop learning, improving yourself and to always question the status quo. Being naturally curious and disciplined helps a lot as well. I would also advise enjoying the journey every step of the way!

The post Fireside Friday with… State Street Global Advisors’ Khursheda Fazylova appeared first on The TRADE.

For those of you that haven’t heard of it, RFM is a not-so-distant cousin of the request for quote protocol (RFQ). RFQ has cemented itself as a central method of execution in fixed income in recent years in light of the advent of electronic trading and the move away from bilateral voice trading and onto platforms.

RFM is a similar concept, also derived from a desire from investors to access as much available liquidity as possible to ensure order fills and achieve best execution. It too is a trading protocol used by traders to gauge interest from several dealers in the market at a time to achieve efficient execution of an instrument.

However, the key difference with RFM is that when using the protocol, a firm will ask for both the pay and receive price for an instrument. The bottom line being that it reduces market impact by showing two-way interest in a chosen instrument to hide a firm’s direction.

“As buy-side traders seek liquidity in larger size trades, the challenge to retain as much information as possible – while at the same time obtaining an executable price – can be difficult to navigate,” State Street Global Advisors’ head of fixed income trading, Sharon Ruffles, tells The TRADE. “As the fixed income market moves towards ever more electronification, RFM allows for price discovery with less information slippage.”

The two-way workflow is no new phenomenon to trading and is used in the execution of several other asset classes. Given the importance of market impact in fixed income, it therefore makes sense that the RFM protocol has seen a rise in popularity in the last year, particularly in the swaps markets, as a natural progression of the market alongside increased electronification. While not everybody is using it, it is growing.

As traders have increasingly begun to adopt algorithms in their execution workflows in fixed income, which are data hungry and protocol agnostic, this too has boosted the use of RFM.

According to fixed income platform provider Tradeweb, the trading protocol has grown from 19% in Q4 2022 in net risk terms, up to 34% in Q4 of last year. Looking specifically at G3 currencies [Euro, Dollar, Sterling] in the rates market, that growth story from 2022 to 2023 was from 17% to 32% – more than doubling in a year.

“Our functionality relies on dealer support for the liquidity to happen on the platform and dealer support really started to grow at the end of 2019,” Tradeweb’s head of European interest rate derivatives, Angus McDiarmid tells The TRADE. “It’s a growing interest for us on the euro government bond side. Whereas the government bond business has historically been very much an RFQ market.”

Market impact

When exploring why demand for this not-so-new protocol to the fixed income scene has soared in recent years, the same phrase is brought up every time: it reduces market impact.

“RFM was worth pushing for a larger in size trade to limit impact and limit dealers from being able to skew price based on knowing their direction,” explains McDiarmid.

Reducing market impact is central to the growth of RFM. One key client user group of the protocol is the hedge fund segment, and it goes without saying that hedge funds are some of the most impact conscious firms out there.

Many of these firms opt for two-way pricing to shroud their market direction and recent regulatory changes have driven a chunk of hedge fund flow that might’ve taken place bilaterally, on-platform. For example, thanks to Mifid and the push to broaden the scope of what should take place on venue, Sonia and Sofr swaps flow that might’ve previously taken place bilaterally now takes place on venue.

Tradeweb subsequently rolled out trading protocols for clients to engage with the Sofr alternative benchmark for US dollar derivatives and €STR for euro derivatives. Traders can use request for quote or request for market protocols and can upload Ibor portfolios into Tradeweb’s list trading mechanism for conversion into risk free rates.

Elsewhere, in emerging markets, where liquidity is thinner and any kind of inclination to trade is likely to be preyed upon, traders here have also typically favoured a two-way model both using voice and now, electronically. The result: a boom in RFM. At Tradeweb, around 67-68% of volume on its emerging markets platform was accounted for by RFM in Q4 of last year. 

“For dealers it very much replicates an existing voice workflow that they have been doing nigh on decades,” Tradeweb’s global chief operations officer for emerging markets, Will Tarr, tells The TRADE.

“That ability to conceal the direction you’re trading pre-trade and then only reveal it to a couple of participants post-trade gives clients a much greater degree of comfort trading that electronically.”

Tradeweb and the London Stock Exchange Group’s (LSEG) FXall launched a new FX swap workflow solution for local currency emerging markets in August last year. The solution links trading workflows in local currency EM bonds and FX swaps through a single user interface (UI). Using the solution, mutual clients of the pair can buy or sell an emerging markets bond via Tradeweb’s RFQ or RFM protocols.

Tradeweb is now working on building out its RFM offering in emerging cash markets in local currencies.

Using an RFM protocol also contributes, Tarr confirms, to better calculation of the mid-price in emerging markets trading rather than look at a static curve. Something that also translates into the rates space as well.

“When you’re asking for one side of that PV [present value] market, you have to calculate how much you’re being charged, what’s the real mid, is the trade PV accurate? It might be in an area of the curve where there’s not a lot of liquidity and granularity and you want to look at a truer TCA,” explains McDiarmid.

“It’s much easier to do that when you put two or three dealers in competition and it makes it much cleaner to assess the real mid of that trade at that time for that size of trade when you have two-way pricing.”

All of this points to RFM as a natural next step in the development of electronic workflows in fixed income. Dealers are becoming increasingly confident quoting two way on platform, McDiarmid confirms, and some of this is driven by transferable behaviour from trading in other asset classes.

“They can still show an axe and skew that price to a direction they want to trade but they’re showing an honest two way at time of execution for that specific size. I’m happy to pay here and I’m happy to receive that,” he says.

“A really good example of that [transferable behaviour] is where we trade swaps versus bonds in non-contingent asset swaps. Clients have questioned, understandably, why they can ask for a two-way price on the swap leg and have to show their direction on the bond leg? It’s about that consistency.”

Rates vs credit

However, when looking at other potential use cases for the RFM protocol, there remains some areas whereby alerting several dealers of your interest – using two-way pricing or not – could prove to be harmful for the buy-side. While the RFM protocol is having an undeniable rise to fame in the rates space, whether it will see the same adoption in credit is another story all together.

Read more – Tradeweb and LSEG’s FXall launch new emerging markets FX swap workflow solution

Many have suggested that the natural next step, following this sudden interest from the street in rates, is for RFM to expand further into other corners of the fixed income sphere, creeping into credit when used correctly. Here is where the use cases of the protocol and its usefulness in reducing market impact become more difficult to justify.

“There is absolutely a place for RFM in fixed income, particularly in local markets, but I think it must be considered carefully what the best execution method is for a particular bond as often the market dynamics or inventory and liquidity of the line don’t result in RFM being the optimal protocol to use,” explains head of European FICC trading Manulife Investment Management, Peter Welsby.

In some markets, regardless of whether or not you’re showing a two-way direction, thanks to the liquidity landscape, it becomes easy to work out a firm’s intentions. This renders a protocol like RFM potentially harmful to execution in some cases. And, makes it extremely important to pick and choose when you use protocols.

“Whilst in smaller sizes it might not make much of a difference, for larger-sized credit trades quoting a multitude of banks, using RFM is likely to worsen the pricing received,” Welsby explains.

“The client may think that they’ve hidden their direction, but often in credit it can be quite predictable which direction the client is. As such, rather than using RFQ with select liquidity providers with strong relationships and market presence to minimise information leakage, the client has shown their full size to a whole host of dealers. This could negatively impact the winner of the trade and evidently won’t result in better pricing in the long run.”

Given inventory restrictions in credit, it’s often more challenging for a broker/bank to make a two-way price if they don’t have the bond to begin with. In credit, it’s also harder to source bonds from smaller issuances than in the local markets and because of that dealers are more reluctant to reveal their hand without a strong relationship with the buy-side client.

“We would consider using the RFM protocol for trades that are normal market size and where the market is deep and liquid,” adds Ruffles. “Market makers will be less sensitive to the direction of the trade and potential for information slippage, and so they are likely to be more comfortable making a tight two-way price.”

RFM has seen a rapid rise in demand in the rates markets in recent months. And this shows no signs of abating given the expected central bank activity throughout the course of this year and the predicted movement in the money markets.

While some macroeconomic factors such as reduced central bank balance sheet could cause a reduction in liquidity that could see a move toward more bilateral trading to protect market impact, RFM is undoubtedly set to continue to grow.

Whether or not it ever becomes applicable to more inventory-driven markets is another question with a less positive answer.

The post Smoke and mirrors: The growth of two-way pricing in fixed income appeared first on The TRADE.