When a bond goes off-the-run, transaction costs rise by an average of 40%, the length of time to execute increases by one-third, prices increase by 15% and market depth falls by nearly 37%, according to a Greenwich Associates report.
The shift from active funds to low-cost index products has put pressure on firms to cut fees to retain assets and clients. That trend, coupled with increases in technology spending, has forced firms to “manage costs aggressively,” William Llamas...
Richard Johnson said, in the short term, the introduction of the futures would "probably just add more fuel to the fire" since they will provide a new avenue for institutional investors to gain exposure to the bitcoin market.
Even bitcoin investor Richard Johnson is surprised by the digital currency's wild ride."I generally consider myself a bitcoin fan and crypto bull but even the action of the last few days has made my eyes water," the analyst at Greenwich Associates...
“I‘m kind of taken aback by what’s happened in the last three months,” said Richard Johnson, an analyst at Greenwich Associates who owns digital currencies and considers himself a bitcoin bull. “I‘m concerned things are moving a bit too quickly.”
“People on the sell-side will need to educate people on the buy-side in how to route trades and how to make the best use of all the venues available," said Richard Johnson.
Greenwich Associates, a research firm, also sees signs that banks are hiring bond traders.
"Trading desk reduction and subsequent personnel upgrades (hiring more people that are tech savvy in lieu of old-school-only traders) is behind us,” Kevin McPartland said.
European institutions paid about $2.9 billion in cash equity commissions for the 12 months through June, according to Greenwich Associates. Of that amount, 46 percent was used to pay for equity research and advisory services.
Money managers’ pay will come under pressure in 2018 as the asset management industry scrambles to manage rising costs and increased competition from cheaper passive funds, according to Greenwich Associates.
