Fixed income ETFs are expediting bonds’ transition to electronic trading, helping create more transparency for bond buyers. As investors use fixed income ETFs for access, liquidity and managing risks in their bond portfolios, their buying behaviors are changing too. They don’t buy single bonds but rather blocks of bonds with exposure to certain characteristics.
Our client BondBloxx is at the forefront of leading this change, bringing more choice and flexibility to how investors navigate the bond market.
BondBloxx was founded by seasoned industry professionals who had collectively launched over 350 ETFs with BlackRock, J.P. Morgan, State Street, and Northern Trust. They understood well the importance of automating various aspects of portfolio management, trading, and compliance. They knew they needed an integrated investment technology platform to do this.
In evaluating providers for their portfolio management and trading platform, BondBloxx needed a true technology partner capable of meeting bespoke requirements, launching quickly, and scaling seamlessly to support the rapid growth they anticipated. None of the larger investment platforms they evaluated could deliver this type of speed, flexibility, and support.
Ideally, they would have a centralized system incorporating an IBOR, OMS with FIX connectivity to multiple venues, risk analytics, and back-office integration with BBH, their custodian/fund administrator. A daunting amount of risk-analytic data points (e.g., duration, KRDs, credit ratings, credit spreads, industry classifications) would be required from multiple sources and over a large universe of bonds. These would need to be easily integrated into the portfolio management views.
Two of the BondBloxx founders were aware of Ryedale but were unsure of its fixed income capabilities. They held initial conversations and demos with the software provider to work through their requirements and ensure the system meets their specific business needs. They were impressed by the system’s scale, flexibility, and overall capabilities. Above all, they believed the Ryedale team would act genuinely as partners by working with BondBloxx to perfect the platform to the benefit of both parties.
BondBloxx implemented the Ryedale Platform just months before launching 7 first-of-their-kind High Yield Sector ETFs. Ryedale provided a seamless integration with the funds' custodian, administrator, index provider, and multiple trading venues. The portfolio managers were happy that the system enabled them to manage their funds with ease and assurance. They rated the Ryedale Platform as the equal or better of any system they had worked with.
Following the initial launch, BondBloxx rapidly expanded its offering with 3 High Yield Ratings ETFs, an Emerging Market ETF benchmarked against a J.P. Morgan index, and 8 target duration US Treasury ETFs benchmarked against Bloomberg indices. Throughout this busy period of new product development, the Ryedale Platform was ready ahead of the day of each launch. It handled all seeding, create/redeem activity, and rebalancing trade orders.
The flexibility of the system’s risk views was particularly well received. Users can configure ‘aspect’ views which aggregate positions according to data points such as credit-rating, ticker, duration, maturity, credit-spread among others. These views can be multi-level and each portfolio can be viewed using the appropriate risk perspectives.
Managing a constant flow of information and turning it into actionable insights is critical to our business. With Ryedale, all current and historical data relevant to our strategies is readily available in the system and shared in real time across our portfolio managers, enabling us to efficiently process information to help deliver compelling performance for investors in BondBloxx ETFs.
Elya Schwartzman,
BondBloxx co-founder
The entire dataset for the daily investment process – index data, accounting data, analytics - is stored in Ryedale’s IBOR with complete history. Pluggable interfaces for indexes, accounting, custody, and trading makes it easy to onboard or reconfigure providers.
Additionally, Ryedale offers continuous data monitoring and quality checks, reducing operating errors and enhancing data integrity. Reliable recordkeeping and retrieval support internal audits, regulatory reviews, and reporting obligations. This helps ETF providers maintain transparency and ensure compliance.
BondBloxx quickly expanded its ETF offerings, launching an impressive lineup of new products. Throughout this rapid growth, Ryedale supported BondBloxx portfolio managers at every step. The Ryedale Platform efficiently managed a growing volume of funds, securities, and create/redeem activities, handling large-scale data points and complex workflows effortlessly. As a result, the platform won the respect of this expert user group as the go-to, core portfolio management system for their growing team.
Dan Goldman, Portfolio Manager at BondBloxx, said about their latest rebalance: “We were actively trading bonds across multiple funds and index providers. Ryedale's system remained up-to-date and their team consistently available, giving us complete visibility into our positions at every step. Having used many other systems in the past, I doubt they would have delivered the same smooth experience as the Ryedale Platform.”