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of the time horizon, allows us better execution decisions- especially in less liquid markets. Truly, being fully involved in the investment process is a big part of our role today as traders.
When we started trading high yield, it used to be mostly voice and now the market and market structure has evolved quite a bit. We now have a choice of protocols- either request for quote, portfolio trading, voice trading, anonymous trading, etc. Really, the first step is trying to decide which protocol to use.
On the electronic trading side, it’ s notable that though its grown, here at Columbia Threadneedle
“ Maintaining strong counterparty relationships, being consistent, and ensuring our processes remain disciplined really matters, particularly in the volatile markets.”
more than 60 % of corporate credit volume is still traded voice, and trading is still very much a trust business. Maintaining strong counterparty relationships, being consistent, and ensuring our processes remain disciplined really matters, particularly in the volatile markets.
Ultimately, we must evolve with technology, by leveraging automation when it makes sense, improving our processes and making sure we’ re adapting to the evolving market structure.
How have things evolved throughout your tenure in the high yield business? And how different is the day-to-day of a trader today? The evolution of corporate credit trading specifically has definitely evolved. If you go back to the early 2000s when TRACE was first implemented that was a major milestone in corporate credit trading with more transparency on pricing. It really tightened up the bid ask spread and has been very beneficial for the buy-side.
Another major milestone has been the growth of ETFs and their effect on market liquidity. This became especially evident during COVID-19, when traditional markets froze but ETFs remained liquid. Prior to the pandemic, bond prices were set by the cash market. However, during COVID-19 we discovered that ETFs continued to trade and provided critical liquidity when cash markets seized up.
The market structure has fundamentally changed since then, and we ' ve had to adapt accordingly. Portfolio trading emerged in 2018 as one response to these shifts. However, the protocol truly evolved and gained prominence after the pandemic, driven by buy-side demand to move large amounts of risk in very short timeframes. ETFs provided dealers with an efficient avenue to facilitate these trades and transfer risk.
Looking at the current landscape, we’ re now at record volumes, with corporate credit trading averaging $ 60 billion per day last year. Liquidity has never been as good as it is now on a macro level, but there are still individual credits where liquidity can be challenging. Those are the times we leverage our relationships and experience to get the best outcomes for our clients.
“ AI is set to touch all parts of asset management, but the million-dollar question is whether it turns from productivity gains to actual investment insight.”
In 2025, we prioritised building out our automation infrastructure at Columbia Threadneedle. The objective was to establish a scalable foundation- given the volume of smaller tickets we handle, we wanted to free up our traders to focus on high-value activities where they can truly impact client portfolios, particularly through
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