Industry Updates

BlackRock adopts Tradeweb’s iNAV calculation service

Tradeweb expects to roll out the service more broadly

Theo Andrew

Stock exchange price board on street

BlackRock has adopted Tradeweb’s new iNAV calculation service across its European iShares range.

The asset manager is the first to adopt Tradeweb’s offering, having launched on 6 February, which provides intraday indications of an ETF’s value, calculated and published every 15 seconds during trading hours.

Tradeweb said the publication of the iNAV is expected to increase market transparency and liquidity for investors, versus the NAV which calculates the price at the end of each trading day.

The trading platform said it has experienced growing demands for ETFs from issuers and institutional clients for an iNAV calculation service, allowing them to enhance their overall transaction cost analysis.

It added fixed income ETFs have been driving demand, due to challenging conditions in the underlying bond market, helping to grow institutional European ETF total notional volumes on Tradeweb to an annualised rate of 32% over the last five years.

According to Tradeweb, it will use a ‘waterfall methodology’ for calculating the iNAV for fixed income ETFs, prioritising live contributions from its platform intraday.

Lisa Schirf, global head of data and analytics at Tradeweb, said: “They are based on executable streaming bond prices, so they provide a more immediate and realistic view of the ETF market at any given point in time.

“This is hugely valuable during volatile market conditions, and we are proud to see the world’s largest ETF issuer, BlackRock, adopt our iNAVs right from the start.”

Jason Warr, global co-head of ETF markets at BlackRock, added: “We are very supportive of Tradeweb, as a leading electronic trading platform, leveraging its strengths to bring greater transparency to ETF investors through the provision of iNAVs for our UCITS iShares ETF range.

“We are continually working to enhance the trading environment and overall market efficiency for ETFs. This is particularly true for fixed income ETFs and we believe Tradeweb’s market insight can help develop further ETF market efficiency for bond ETFs, and across other asset classes.”

Tradeweb said it expects to expand its iNAV calculation service across products, clients and geographies.

It added it will also offer an enhanced iNAV data feed comprising of iNAV Bid, iNAV Mid and iNAV Ask values, helping investors monitor trading thresholds and serve as a reliable indicator of premiums and discounts.

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