Tradeweb has launched a new tool that promises to make it easier and faster to source, price and trade the basket of underlying bonds needed to create or redeem shares in fixed income exchange-traded funds (ETFs).

Enrico Bruni, head of the Europe and Asia business at Tradeweb.

The recent growth in demand for European fixed income ETFs has created a need for an electronic trading solution that streamlines this process.

The tool, which was developed in collaboration with iShares, the ETF platform of BlackRock, supports trading on a wide range of bonds, and clients can access a variety of price feeds to value each basket, ultimately improving efficiency and liquidity.

It enhances the list functionality already available for cash bond asset classes on Tradeweb by making it possible for users to source ETF basket constituents and weightings and then simultaneously price and trade the bonds.

Enrico Bruni, head of the Europe and Asia business at Tradeweb, said: “Our continued focus on innovation and ongoing dialogue with our clients has been fundamental in helping us to shape this solution. This is a great example of how we can effectively combine technology, industry insight, and our breadth of coverage to address this specific market requirement in a way that will benefit the whole European ETF industry.”

Leland Clemons, head of capital markets EMEA at iShares, added: “We’ve experienced a significant increase in demand for fixed income ETFs over the past few years and with this has come the need for more efficient ways to price and source bond baskets. Collaboration with Tradeweb brings to the ETF market the combined benefits of dealer expertise in pricing these securities and the operational ease of an electronic platform. This tool will help to increase efficiency and liquidity for fixed income ETFs across Europe in support of the continued market growth.”

The Tradeweb ETF hedging tool supports trading on European government, corporate, and covered bonds, SSA (supranational, sovereigns and agencies), US treasuries and JGBs. Users can request prices from several liquidity providers simultaneously and trade multiple line items at once. Several calculations will be available to value the baskets, including volume weighted average price (VWAP), total principal proceeds (TPP) and total net proceeds (TNP).

Tradeweb launched its ETF trading platform in 2012.