Breaking Down Boundaries:Multi-asset Trading
State Street Global Advisors’ Head of Trading in Asia Pacific, Stephen Mantle, talks about the investment decision making process and the firm’s pioneering multi-asset trading capabilities.
State Street Global Advisors (SSgA) has a global platform, further enhanced by internal customisation, which enables us to cater to client demands. These internal capabilities can customise to just about anything, and our aim is to not only meet the client’s demands, but exceed them.
We cover something like 800 indices for our clients, so there’s not very much that we don’t look at. At the end of the day, the investable universe is defined by the client; what the client needs and what the client requires.
Frontier markets present different challenges, including some delivery versus payment issues, counterparty issues and head-winds with regards to credit risk. However, these are concerns that we constantly look at to help us offer a broader platform in these markets.
Existing and new clients, in their search for returns in difficult market conditions, are looking for more customised benchmarks and increasingly customised portfolio solutions. This is an area in which we are expanding and continue to pay close attention to.
The Role of Trading in the Investment Decision Making Process
A few years ago being a portfolio manager and a trader were two very segregated jobs: PMs made the decisions and traders tried to implement them. However, the two jobs are now much closer together, and the traders are part of the investment group. In today’s environment, the PMs consult the traders about the construction of the basket with regards to liquidity and other issues. There is dialogue throughout the implementation of the basket. There will also be a conversation afterwards with regards to market impact and how we can improve the process.
As a further safeguard and to ensure smooth communication, State Street has PMs stationed globally, and the teams will have local specialists. Therefore, if we can’t contact the PM, we can always contact someone that is stationed here in Asia and they will be fully briefed on how the basket should be implemented.