Outsourced trading boosts investment performance
BOSTON, UNITED STATES — Financial services provider State Street Corporation has unveiled significant findings from its latest research survey.
Detailed in The Outsourced Trading Advantage: Evidence from Early Adopters report, the survey underscores the substantial benefits of outsourced trading. Findings revealed that 83% of asset managers and asset owners have seen improved investment performance through this approach.
Comprehensive survey insights
The survey, considered the largest and most comprehensive of its kind, involved approximately 300 asset managers and asset owners from North America, Europe, the Middle East and Africa (EMEA), the United Kingdom, and the Asia Pacific (APAC), with assets under management (AUM) ranging from under $30 billion to over $50 billion.
The findings indicate that 85% of respondents from North America and 86% from Europe reported enhancements in their investment performance due to outsourced trading.
Key benefits of outsourced trading revealed
The survey highlights several key benefits reported by current users of outsourced trading:
- Increased efficiencies: 55% of current users reported increased efficiencies.
- Reduced costs: 33% of respondents noted cost reductions.
- Improved investment performance: Over 80% reported some degree of improved investment performance.
Satisfaction levels among early adopters are notably high, with 79% expressing satisfaction, which rises to 83% in EMEA and 81% among very large funds (AUM over $50 billion).
Addressing concerns of potential outsourced trading users
Potential users of outsourced trading have expressed concerns about cost-effectiveness (61%), loss of control over trading activities (56%), and a lack of understanding about the benefits (56%).
However, the survey indicates that flexibility, customization, and technical integration capabilities are crucial attributes sought by outsourced trading partners.
“The findings from this survey highlight the potential and the real value outsourced trading is bringing to the industry, and we are well-equipped to help clients understand the offering and help with the integration,” said Scott Chace, co-founder of CF Global Trading and head of Trading for Portfolio Solutions at State Street.
State Street’s research provides a comprehensive look at the evolving landscape of outsourced trading.
Dan Morgan, State Street’s Head of Portfolio Solutions, said that they are hoping “to shed light on the emerging move towards outsourced trading and provide clarity regarding the significant benefits it can offer” through the findings of the research.
