Investors are finding less is more when it comes to corporate bond trading.
Electronic-trading technology has matured to the point that about three-quarters of credit investors say they can easily buy or sell orders up to $5 million, according to research by Greenwich Associates. That compares with about one third in 2016, the financial-services consulting firm’s report showed.
Life insurers are major users of corporate bonds, and 16% of the buy-side traders that Greenwich Associates polled were at insurers.
The issue of liquidity — or the ability to buy and sell securities— has long plagued the corporate bond market, where Wall Street maintains a strong grip on a business largely done by phone or instant messaging. While stock trading is almost entirely done electronically in the U.S. and Europe, fixed-income trading has been slower to adapt, especially for larger orders.