July 19, 2011

Following heavy investments in fixed income trading platforms over the past few years, broker dealers are locked in heated battle to win institutional trading market share in the fixed income space, according to Greenwich Associates’ study results released today.

In 2011, no fewer than three dealers — Barclays Capital, Deutsche Bank and J.P. Morgan — are deadlocked at the top of the fixed income market with market shares in institutional trading of roughly 11.5%, according to Greenwich Associates 2011 U.S. Fixed-Income Study.

Two firms, Goldman Sachs and Citi, follow close behind with market shares topping 10%. These firms are the 2011 Greenwich Leaders in Overall U.S. Fixed-Income Market Share

“Compared with recent years, the results are clear: Competition is flattening out the market and institutions are spreading their business more broadly,” comments Greenwich Associates consultant Tim Sangston in the release summarizing the fixed-income study results. “These firms and a group of other strong competitors have built market share by enticing institutions with aggressive pricing and intense, high quality coverage and service.”

The Greenwich Share Leaders in U.S. fixed income, credit products, are J.P. Morgan, which tops the market with a market share of 15.2%, followed by Bank of America Merrill Lynch, Deutsche Bank, Morgan Stanley, Barclays Capital, and Goldman Sachs.

Roughly 80 percent of U.S. fixed-income trading volume is in rates products, which includes MBS pass-throughs. The 2011 Greenwich Share Leaders in U.S. Fixed Income, Rates Products, are Deutsche Bank, Barclays Capital, J.P. Morgan, Goldman Sachs, and Citi. In securitized products, the 2011 Greenwich Share Leaders are Barclays Capital, Bank of America Merrill Lynch and Credit Suisse. In emerging markets, the 2011 Greenwich Share Leaders are Deutsche Bank, Barclays Capital, J.P. Morgan, HSBC, and Citi. The 2011 Greenwich Share Leaders in Municipal Bonds are Citi, Bank of America Merrill Lynch, J.P. Morgan, and Morgan Stanley. Additionally, every year Greenwich recognizes U.S. fixed income dealers whose institutional clients award them service quality ratings that exceed market norms. In 2011, the Greenwich Quality Leader in U.S. Fixed Income for both Sales and Trading is Bank of America Merrill Lynch. The 2011 Greenwich Quality Leaders for U.S. Fixed-Income Research are Barclays Capital and J.P. Morgan.

Ivy is Editor-at-Large for Advanced Trading and Wall Street & Technology. Ivy is responsible for writing in-depth feature articles, daily blogs and news articles with a focus on automated trading in ...