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...
An annual Greenwich Associates study asks the buyside — the fund managers and other investors — to apportion its commission payments according to the services received. Year after year, the responses show that clients allocate 45 per cent of...
“While over time the change is manageable, in the short term it poses an operational nightmare,” said Kevin McPartland, head of market structure research at Greenwich Associates.
Andrew McCollum says success will be “difficult if not impossible” for active managers that stick to a traditional stockpicking approach, even if they enjoy temporary periods of prosperity with fashionable products or when markets rise.
