SSGA and Bloomberg enhance fixed income ETF creation/redemption process

Dec 22nd, 2016 | By | Category: Fixed Income

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State Street Global Advisors (SSGA) and Bloomberg have added enhancements to Bloomberg’s Fixed Income ETF Basket service, which automates the process of gaining access to liquidity necessary to create and redeem fixed income ETFs.

SSGA and Bloomberg enhance fixed income ETF creation/redemption process

The enhancements to State Street’s and Bloomberg’s Fixed Income ETF Basket service allows authorized dealers to proactively provide existing bond inventory from which providers can create targeted baskets.

Introduced in late 2014, SSGA clients have used the service to streamline ETF basket creation and redemption by automating the communication of their daily requirements to targeted recipients. Authorized dealers view and respond to these opportunity sets, create baskets, submit them to providers for approval, and monitor the status of submissions.

The tool integrates functionality from across the Bloomberg Terminal, including Bloomberg’s Trading Solutions Order Execution (TSOX), Portfolio Analytics and Risk (PORT) and Fixed Income Trading (FIT) solutions.

The enhancement to the service enables dealers to proactively provide existing bond inventory from which providers can create targeted baskets.

“During the first nine months of 2016, investors have added more than $77bn of net new inflows into bond ETFs, which underscores the demand for increased liquidity and transparent exposure in the fixed income markets,” said Tim Coyne, Head of Institutional Sales and Global Capital Markets for SPDR ETFs at SSGA. “In offering clients improved access to the benefits of fixed income ETFs, these innovations give portfolio managers more choices and flexibility to customize their bond exposure.”

“With the success of our initial partnership with State Street to automate the creation and redemption process for fixed income ETFs, we are thrilled to announce Bloomberg’s Fixed Income ETF Basket service 2.0 which will now enable clients and dealers a more automated and efficient way to create ETF shares using their existing bond inventory,” added Dave Mullen, Senior Business Manager for Fixed Income ETF Products at Bloomberg. “This enhancement creates an additional way for State Street’s institutional clients to source liquidity in the market.”

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