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“All-to-all adds a new
flavour to it, but I
don’t think it changes
anything structurally,
in the way that traders
and PMs communicate.”
ERIC BOESS, ALLIANZ
GLOBAL INVESTORS
AUTOMATION MAKING
COMMUNICATION JUST AS
CRUCIAL AS EXECUTION,
SAYS ALLIANZ’S BOESS
BUY-SIDE KEYNOTE INTERVIEW FOCUSES ON VALUE OF
AUTOMATING FIXED INCOME TRADING PROCESSES.
A
llianz Global Investors’ (AGI)
global head of trading has high-
lighted how automation in fixed
income can enhance trader-to-port-
folio manager (PM) communication
and scalability, alongside execution.
Eric Boess highlighted the im-
portance of communication during
a buy-side keynote interview with
Rick McVey, chief executive of
MarketAxess.
“The use of electronic platforms,
while it is driven by the need to
maintain productivity, frees up
time for traders to do their actual
day-to-day job, which is communi-
cating with PMs, communicating
what the Street has in terms of
information back to the PMs and
vice-versa,” Boess said.
“For me, electronic trading is not
only about efficiency in trading,
that’s obviously one of the driving
forces, but making traders an even
34 // TheTrade // Winter 2018
more active part of the investment
strategy that we are running.”
Boess detailed that as AGI has
an exclusively active management
strategy and works on a decen-
tralised desk with PMs spread out
across multiple locations, making
the process of offering new prod-
ucts and greater flexibility is “par-
amount”, which can be achieved
through greater use of electronic
trading systems.
“Throwing more money or more
people at the problem is not an
option anymore, which is why
being a little bit more electronic
and scalable is something that is
inevitable,” he said.
The proliferation of electronic
platforms, such as all-to-all trading,
in the fixed income market may
have increased the number of play-
ers in the space and eased access to
liquidity for some, but it also means
that firms such as AGI must be far
nimbler and quicker the react to
new developments.
“All-to-all adds a new flavour
to it, but I don’t think it changes
anything structurally, in the way
that traders and PMs communi-
cate,” he said. “What it does do is
allow traders to get any axe not just
from a dealer. So, more potential
axes feeding into the system. That
obviously requires us, as traders, to
be a little bit more nimble when it
comes to reacting on those axes.
“That’s where technology can
help, but it’s not just about speed
of communication, it’s also about
quality of communication.”
AGI went live with an automated
execution system at the start of the
year and Boess stated that the firm
has seen “no surprises” in the time
since, but did not put too much em-
phasis on the execution side.
“If you look at our equity busi-
ness, which, at first glance looks
like it could all be automated…we
barely auto-execute in equities,
so in a way, fixed income has
bypassed equities already,” Boess
stated. “Some of the features that
fixed income platforms build
around what you can do with
auto-execution often cross the line
to algorithmic trading, so the set of
parameters we are using is much
harsher than in most equity algo-
rithms and I think that has great
potential for the future.”