AllianceBernstein tracking fixed-income execution with Interactive Data
Investment manager AllianceBernstein is working with Interactive Data, to help evaluate its trade execution quality and perform transaction cost analysis (TCA). The work will be done across various mutual funds and separately managed portfolios using Interactive Data’s Best Execution (Best Ex) service.
The service leverages its Continuous Evaluated Fixed-Income Pricing to run TCA for fixed-income security trades. The tool assigns a score to trades based on measurement of the execution quality of a trade relative to other comparable trades within a selected universe.
“As a global leader in fixed-income active management, we consistently look at ways to reduce transaction costs to drive improved returns, along with asset allocation and security selection,” said James Wallin, senior vice president at AB. “The path to improvement in any endeavor begins with measurement, and Interactive Data’s Best Execution service will help us to measure our trading execution quality across asset classes, counterparties, and venues.”
The limited trading activity which is typical for all but the most liquid bonds in the most liquid asset classes has made it difficult for market participants to assemble the right combination of comparable trades to help them make meaningful comparisons around execution. At the same time, changes in market structure and heightened scrutiny by regulators on best execution have added to the burden of proof on firms.
“Evaluating trade execution quality in fixed-income markets has been challenging for many market participants, although it is a regulatory requirement,” explained Andrew Hausman, Interactive Data’s president of Pricing and Reference Data.
Reported by Dan Barnes