Institutional E-Volume up

Large institutions are shifting trading volume to algorithmic avenues of execution as the overall commission pool remains flat, according to a new study from Greenwich Associates.

Greenwich Associates says it conducted interviews regarding US equity investing with 223 US equity portfolio managers and 321 US equity traders between November 2015 and February 2016 and estimates the annual pool of cash equity commissions paid by institutional investors to brokers on US equity trades to be US$9.65 billion, down more than 30 percent from its peak in 2009.

While that might seem like a dismal figure, it is important to note that the 2016 level is about 4 percent higher than the low of $9.3 billion reported in 2013, says Richard Johnson, vice president in the Greenwich Associates Market Structure and Technology group, and author of the report: Flat E-Trading Volumes in US Equities Mask Increase Among Larger Accounts.