In The News

On the risks from the recent “unbundling” regulations announced in Europe, the annual Greenwich Associates survey asks the buy side — the fund managers and other investors — to apportion its commission payments according to the services received.

Greenwich Associates, in looking ahead through 2017, sees juniorization of staffing models and low-touch delivery channels for lower-value clients as the norm. Only high value clients will command the best and brightest resources, it says.

Greenwich Associates estimates that algorithms are now used to handle up to 80% of buyside order flow, but institutions are increasingly dissatisfied with algos that cannot be customized.

The recent boom in exchange-traded fund (ETF) activity could be behind a significant reduction in commission rates on emerging market equity, according to Greenwich Associates.  The company’s latest report explained premiums paid on emerging...

The premium that institutional investors pay to trade emerging markets stocks rather than their peers in developed countries narrowed markedly in 2016, according to Greenwich Associates.

Where some markets remain “complex, opaque and illiquid," active management can play a bigger role, Greenwich Associates says.

“If a pension fund or an asset manager can't get the paperwork finalized, they wouldn't be able to trade,” said Kevin McPartland. “Their compliance offices wouldn't allow it. ... Billions of dollars in trades will be affected by this.”

Flows into fixed income exchange-traded funds (ETFs) are growing rapidly with Asian institutional investors looking to earmark an increasing chunk of their investments into such products this year, according to Greenwich Associates.

“Buy-side firms are skeptical of the maker-taker pricing model believing that it skews brokers’ routing incentives in favor of best rate as opposed to best execution,” said Richard Johnson, senior analyst at Greenwich Associates.

The number of investors trading fixed income electronically has continued to grow year-on-year, with 46% now stating they trade at least some of their volume electronically.  A Greenwich Associates report found the growth in electronic trading...