[ B U Y - S I D E C O V E R | R Y A N R A Y M O N D ]
trades all at the same time ,” he explains .
“ All of those hit the market in different liquidity fashions so that the wake behind you is smaller and you ’ re no longer this aircraft carrier but instead a much smaller vessel that moves faster . Given our setup on the trading desk , and because of the way that we approach portfolio trading , we are in a position to be extremely nimble across all of our products . We use a combination of primary markets , portfolio trading and traditional secondary block liquidity to adapt our portfolios to any changes that come very quickly and cost effectively .”
“ All of those hit the market in different liquidity fashions so that the wake behind you is smaller and you ’ re no longer this aircraft carrier but instead a much smaller vessel that moves faster .”
Portfolio trading expertise Central to LGIM ’ s nimbleness and diversified strategy is portfolio trading . Something that Raymond confirms LGIM specialises in . Portfolio trades allow traders to execute a basket of stocks in one single transaction , minimising costs and allowing traders to bundle less liquid or more difficult to trade instruments in with more liquid transactions . The concept has exploded in the last few years , egged on by market conditions and volatility brought on by the pandemic and other macroeconomic factors .
“ We ' re very fast at it [ portfolio trading ], so if we get the idea in our head that the market is turning we can turn that into a trade within a very short period of time and execute that day if we want to and move the entire direction of our portfolios . It ’ s [ portfolio trading ] the way the market is going and swimming downstream with liquidity instead of fighting it is a sure way to reduce transaction costs .”
LGIM has completed over 1,000 portfolio trades since 2020 , averaging more than one a day with an average transaction cost of half a basis point and
28 // TheTRADE // Q3 2024