BofA launches Premium ETF Algorithm

27 July 2010

Bank of American (BofA) Merrill Lynch has launched a premium version of its exchange-traded fund (ETF) algorithm.

According to the financial institution, the new technology will allow clients to analyze the market depth and best price over an ETF portfolio.

ETF-aX searches for the best combination of stock, futures and ETFs, then trades them automatically to find the most competitive prices.

It also uses the information to source the most available liquidity, the financial institution explained.

Charlie Whitlock, an execution consultant at BofA Merrill, said: “The primary challenge with trading ETFs is market fragmentation; liquidity is limited outside of the top-ranked ETFs

"By using ETF-aX, clients are able to leverage our in-house ability to trade a combination of the component parts in different markets, gaining liquidity at more efficient pricing."

Earlier in the month, the bank announced it generated second quarter income of $3.1 billion, a figure which was slightly lower than the $3.2 million seen in the same period the previous year.

The financial institution cited the sale of non-core business assets and lower credit costs as the main reasons behind the results.

By Jim Ottewill

Become a bobsguide member to access the following

1. Unrestricted access to bobsguide
2. Send a proposal request
3. Insights delivered daily to your inbox
4. Career development