Bloomberg has launched a new tool, Strategy Optimizer, aimed at enhancing the efficiency of exchange-traded fund (ETF) trading workflows while reducing execution costs. The solution is accessible via RFQe, Bloomberg’s ETF Request for Quote service, and is fully integrated with EMSX, the firm’s equities-focused execution management system.
Strategy Optimizer allows portfolio managers and traders to process large lists of ETF trades with a single action. By analysing multiple ETFs and their underlying holdings, the tool identifies and groups correlated trades, helping to minimise market impact and trading risk. Clients can adjust trade packages or create new ones based on their investment strategies before routing them to over 200 dealers on RFQe for pricing and execution.
“The Strategy Optimizer is driven by logic based on the underlying ETF constituents,” Paul Kaplan, Global Head of Equities at Bloomberg, explains to TradingTech Insight. “Users can adjust parameters, such as the minimum percentage of overlap between ETFs. The Optimizer looks at characteristics of those underlying securities – like sector, duration, and constituent overlap – to suggest optimal trade packages. For example, equity ETFs might be matched by overlapping holdings, while fixed income ETFs could be matched using duration or sector breakdown. Trade size and other inquiry characteristics are also factored in.”
He continues: “This feature was built drawing on feedback from both buy-side and sell-side clients as well as our in-house analytics teams, and there’s flexibility for users to define their own parameters. Strategy Optimizer surfaces potential trade packages based on user-defined inputs, and the client always retains control over which inquiries to send and trades to execute.”
The tool is designed to support improved ETF liquidity provision, particularly in portfolio trades and rebalances, by enabling market makers to better match offsetting ETF exposures in multi-leg RFQs. This is designed to contribute to a more efficient and resilient trading environment, helping to lower costs for end investors and enhance overall market functionality.
Strategy Optimizer builds on Bloomberg’s integrated analytics and pairing optimisation logic. The development reflects ongoing collaboration with institutional clients and responds to the increasing complexity and growth of ETF trading strategies.
“It’s being used in a range of workflows, including portfolio rebalancing, transitions, and thematic trades, says Kaplan. “One example: a client looking to buy SPY and sell QQQ. These ETFs have overlapping holdings, such as Apple, Microsoft, etc., so the package may reduce market risk for the dealer. Because there’s overlap, the dealer’s hedging cost may be lower, which could allow them to offer more competitive pricing. Once the optimal package is created, the client can submit it through RFQe for pricing and execution.”
RFQe, part of Bloomberg’s broader ETF product suite, includes tools for portfolio analytics, real-time data, and evaluated pricing. Operated by Bloomberg affiliates across the US, Europe and Asia-Pacific, RFQe supports trading in more than 175 markets and connects over 9,000 firms to more than 1,500 dealers globally via Bloomberg’s Electronic Trading Solutions platform.
“Clients are already reporting improved pricing, reduced market impact, and significant time savings,” notes Kaplan. “Some clients who previously spent hours – or even days – manually identifying optimal trade packages can now do it in seconds using Strategy Optimizer. That’s a core part of our overall vision: to improve workflows by integrating Bloomberg’s data, analytics, and trading tools into a seamless experience.”
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