Northern Trust is offering a new trade execution analysis service to its institutional clients.
The automated trade execution monitoring tool aims to allow institutional clients to identify and analyse the drivers behind fund trading costs – commissions, trade execution, and local fees for equity holdings – in order to cut the costs of trading. Reports to clients compare the daily prices of manager trades against the Volume Weighted Average Price, or VWAP, and provides summary report information by manager, country, broker, and total fund.
“Either buying above or selling below this average price can detract from the value of a fund, and knowing the true execution costs can help fund managers better identify and analyze the drivers behind their fund trading costs,” says Jennifer M. Pechin, Vice President, Northern Trust. “It’s a powerful transaction analysis tool that complements Northern Trust Securities’ Commission Recapture service. Together, Northern Trust provides institutional clients with a comprehensive suite of tools that provides transparency to their overall trading costs.”
“I tend to believe my managers are obtaining best execution, but I had no way of verifying it,” adds Jeb Burns, Director of Investments, Michigan Employees Retirement System. “Now, I have a tool that allows me to easily identify the areas that may be adversely impacting my fund’s trading costs.”