Agile Trading in Action

Published 25-Aug-2016

Natalie Waller, Head of Global Equity Beta Solutions, UK explains the vital role that the right trading strategy plays in efficiently trading index changes.

Choosing the right trading strategy to implement index rebalances is one of the most critical activities in index fund management. Getting it right provides the desired exposure in a low-risk and cost-efficient way.

To help accomplish this, SSGA uses a model we call Global Organized Trading, or GOT for short. This model encompasses a series of trading strategies that are optimized for each type of index event as well as variants that can accommodate the differing sizes and risk tolerances of each of our clients’ portfolios.

These trading solutions were developed with input from a wide and global group of experts from our Trading, Portfolio Management, Research and Transaction Cost Analysis teams. They’re formed after an in-depth analysis of the factors that could affect the trade itself.

Generally, our approach includes, at a minimum, separate strategies for the lower-, medium- and higher-risk tolerance portfolios but in some situations we define further trading tactics for special cases. Some securities are best traded differently and warrant a specific trading style.

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