Retail investors are on the hunt for fixed-income products with decent yields. The trouble is that the bond market for individual investors is often opaque, making it hard for financial advisors to get a keen sense of what retail investors are thinking.
So BondDesk, the fixed-income trading and technology firm, is setting out to clarify the workings of the retail bond market in a new service that rolled out on Oct. 12. BondDesk Market Transparency Report is a free service that will offer monthly reports on corporate bond trading activity among retail investors.
The BondDesk Market Transparency Report aggregates all of the data for trades in batches of 100 bonds or less. In doing so, BondDesk is hoping to give advisors insight into which corporate bonds are hot, trading volume for individual issuers, and whether bonds issues by individual investors are priced competitively.
The service, accessible from www.bonddeskgroup.com, features a listing of current offerings on the BondDesk platform by asset class, the most active corporate issuers, and a yield matrix. BondDesk is hoping that advisors will find its yield matrix particularly useful, according to Chris Shayne, director of Mill Valley, Calif.-based BondDesk Group. Retail bond trades are much smaller than institutional transactions, which can typically happen in batches of one million or more. As such, retail bond trades incur higher transaction costs and their yields are slimmer, Shayne said.
The BondDesk Group is already a familiar name to independent advisors and those who work at brokerage firms. The firm attracts about 100 contributing dealers, which provides about 35,000 live and executable offerings to 2,000 broker-dealers. The company tracks almost 12,000 unique corporate bonds, and executes more than 20,000 transactions per day. All of this, it says, gives the company and its clients a more robust picture of the retail bond market, and creates a stable benchmark to judge the prices of individual bonds.
“We focus on retail because it is our bread and butter,” Shayne said. “If advisors need to know what’s going on in the retail market, we know exactly what the trading activity is.”
The monthly report will provide the company’s exclusive analysis and data on a range of market trends, including a market recap, a running history of yields and spreads dating back to 2006 and a yield matrix table that will provide median yields for each credit rating and maturity. The yield matrix will be broken out by financials, industrials and utilities. The report will also include volume trends, tables that list the most actively traded corporate issuers, and the highest and lowest buy/sell ratios.