MarketAxess launches MKTX US Investment Grade 400 Corporate Bond Index

Dan Barnes

Bond market operator, MarketAxess, has launched the MKTX US Investment Grade 400 Corporate Bond Index (MKTX 400 Index). The launch of MarketAxess’ first tradable index broadens the company’s scope of data offerings in the fixed income market.

The MKTX 400 Index, administered by MarketAxess Technologies, tracks the performance of 400 US dollar denominated investment grade corporate bonds with higher-than-average liquidity relative to the broader US corporate bond market. Powered by MarketAxess’ proprietary liquidity and pricing data – Relative Liquidity Score and Composite+ pricing engine – the Index combines actionable liquidity with broad market exposure.

Chris Concannon, president and chief operating officer at MarketAxess, commented, “MarketAxess has a unique view into the traditionally fragmented and less liquid fixed income market. We are leveraging our proprietary data sources to construct an index with improved liquidity, transparency and a high availability of the constituent bonds.”

MarketAxess’ data capabilities can support real-time pricing, liquidity assessment and valuation, in turn supporting transparency and tradability in index products. The application of tradable and liquid indices can support exchange traded funds and also be used to enhance portfolio functions, such as tactical adjustments, optimising cash positions, rebalancing, diversification, streamlined create/redeem processes and building block portfolios, as well as acting as substitutes for credit default and total return swaps (CDX/TRS) vehicles.

Kat Sweeney, head of index and ETF solutions at MarketAxess, added, “We’ve seen in our data how index products like ETFs are transforming the bond market, and we believe they will be an increasingly important driver of the market. Our MKTX 400 Index prioritises tradability and liquidity. By defining the eligible bond universe by liquidity factors, we can help reduce the cost of implementation, increase two-sided market participation and improve transparency, without deviating from traditional market performance measures.”

©Markets Media Europe, 2022