April 22, 2025 — European corporate bond investors have found greater efficiency and improved execution via electronic trading and are now taking the next step towards automation. Dealers are reacting to support this change in client behavior, offering not only market color but also advise on how to navigate the e-trading landscape.

“Electronic trading platforms have become critical catalysts, fundamentally transforming how European corporate bonds change hands,” says Kevin McPartland, Head of Research at Crisil Coalition Greenwich Market Structure & Technology and author of Electronic trading and automation in the European corporate bond market. “Digital innovation is reducing search costs, compressing execution times, and providing market participants with unprecedented access to liquidity.”

While investors still prefer picking up the phone and talking to a human dealer for large block trades, approximately 85% of investors trading investment grade corporate bonds and roughly 80% of high yield investors traded at least some of their volume electronically last year. Thanks to those high levels of adoption, 63% of investment grade bonds and 44% of high yield bonds traded electronically in 2024 by notional volume. 

Traders are also embracing portfolio trading, which can serve as an effective and cost-efficient execution tool. Approximately 42% of investment grade bond traders executed a portfolio trade in 2024, up from 40% in 2023, with asset managers being the most common users.

In another important trend with the potential to alter the economics of trading for both investors and dealers, 8% of European buy-side corporate bond trading volume is now conducted via automatic execution, with no human intervention. 

“Although auto-execution remains in in the high single digits in terms of volume, automation tools are becoming more widely available and we expect adoption rates to rise quickly in coming years,” says Kevin McPartland.

Electronic trading and automation in the European corporate bond market analyzes trends in market-wide trading activity, based on interviews with 117 investment grade and 85 high yield bond traders, examines growth in electronic trading, both overall and by channel, and discusses how dealer relationships are changing in this dynamic market.