Five ways to improve the automation of ETFs and hedge funds

While markets are becoming more efficient every month, COOs may be finding that the tools they have to hand are not keeping pace with the latest requirements.

Complex asset management businesses are still being supported by a variety of disparate trading systems which management teams have to find ways to stitch together into something that will keep investors and regulators happy. It is not an easy task. Here are some ways technology like our Safari platform can help fund management firms to get ahead of the efficiency curve.

  1. Implementation of ‘true’ STP

Straight through processing (STP) has been around for decades, but when we talk about true STP, we mean trade processing that is being carried out on a front to back basis on a single system. Often you will find that STP is being managed by different platforms operating under an umbrella system. This is good, but it is not perfect. In scenarios faced by managers like those seeking to launch ETF products, for example, true STP can play a big role in supporting fully automated trade processing in a homogenous environment. When ETF managers are focused on reducing their fees below 70 basis points, true STP has to be a key tool in their operational composition. Using multiple systems to manage an ETF creates too much latency which in turn will create unwanted expenses.

  1. Flexibility of approach

Flexibility is something that trade technology still needs to possess if it is going to meet the requirements of funds that follow a strategy outside the plain vanilla strategy envelope. Hedge funds and CTAs want to trade sophisticated markets but look for the trade support and automation that will let them automate their trade processing and reconciliation activities. This requires technology that can be readily adapted to new instruments, or where the client relations team possesses the requisite knowledge – and willingness – to build out the needed instrument coverage. Just because your fund is trading an esoteric market does not mean you need to be implementing expensive and error prone manual processes.

  1. Avoid dedicated IT projects

Growing fund managers can quickly find themselves burdened with multiple IT systems. When new product or regulatory requirements emerge, you will soon face the need for expensive development projects and dedicated IT personnel that will push costs up astronomically. Expectations that funds will run on robust infrastructure get ever higher, however. An organization can quickly build up ‘technical’ debt with conflicting legacy systems running under one umbrella. Portfolio management platforms like Safari, which work on the Software as a Service (SaaS) model, are intended to support a multiplicity of requirements without the need for new development projects: managers can add further functionality from Safari as they require it. Regular software release schedules mean that the tech is kept up to date seamlessly, again without the need to reference dedicated upgrade projects.

  1. Emphasis on operational outsourcing

At Truss Edge we have been working for over 20 years in the demanding operational environments of leading asset management firms: our clients, great and small, have come to understand the advantages of outsourcing to highly experienced teams. Fund managers have become less protective of their operational environments than they were when we started out, as they have realised that outsourced solutions can still partner closely with the rest of their organisation and offer a high degree of automation at the same time.

  1. Automate your regulatory reporting

Depending on your level of exposure to EU markets and clients, you will have seen the demand for regulatory reporting ramping up over the last couple of years, and particularly since the implementation of directives like EMIR and MiFID II. The level and frequency of reporting being asked for by regulators is picking up in tempo all the time and creating real operational challenges for COOs and trading desks. Current regulations ask for an enormous level of real time data capture and transparency and a high level of automation in report writing. Yet many of the applications on the market are finding it difficult to keep up with this requirement. Much time, money and regulatory risk can be reduced by implementing technology like Safari that can handle current requirements.

For more information on how we can help you to bring the benefits of automation to your portfolio management environments, and a demo of the capabilities of Truss Edge Safari, please contact

Scroll to Top