Kyle Voigt: Okay. and just for a followup, just taking a step back, if we were going to kind of rewind maybe five years ago and think about the opportunity that you had in high-grade and high-yield from a market share standpoint, I don’t think anyone would have guessed that you would have effectively had the same market share in both as we sit here today. So I guess the first part of the question is, just given the different liquidity dynamics in these two markets, do you still think that high-grade total electronic share will ultimately settle at a higher level than high-yield over the long-term? And, just to follow up on Chris Allen’s earlier question, is there some level of market share where it just gets harder for a single player to gain incremental share? Is that playing into anything that’s happening in high-grade at all, because obviously the high-yield dynamics seem much different right now with the momentum there?
Chris Concannon: So first on electronic share and electronic adoption across the fixed income market, I do see that over, we will see differences in adoption across the various products that we offer. So obviously investment grade has seen the highest adoption of electronic trading, high-yield is growing rapidly, particularly on our platform. If you look at emerging markets, the opportunity is one of the largest opportunities globally. But we’re seeing higher adoption rates there, particularly in 2022, where we have record shares, record share in both TRACE and global EM market share, estimated market share. I think munis is probably one of the most interesting product for electronic market share is probably in the most need of electronic adoption, particularly given the size of the average ticket in munis and we’ve seen — we had a record year of adoption in munis, both record market share and record ADV.
I would say that we look at it holistically across the entire fixed income landscape, not just one product. Our clients don’t trade just high-grade. They trade across the entire fixed income landscape. So when they — we think about electronic adoption, it certainly can achieve in my view, the 90% rate that we see in other asset classes, because at one point in the electronic adoption evolution you get to a point where you have to go all the way, not just part of the way, and your workflows become fully automated and fully electronic. So I predict very much higher levels of electronic adoption across high-grade, high-yield, emerging markets, and in particular munis and obviously we think we will play a key role in that. When our clients are outsourcing trading solutions, they’re not studying market share by product like we all do.
They’re studying that solution and the quality of execution that’s being delivered on the other side. Hopefully that answers your question.
Richard McVey: Just one, add on too, Kyle. I think with high-yield in particular, the liquidity challenges in the U.S. credit markets were most pronounced in high-yield and that plays right to our favor. And what I think it’s showing you is that when liquidity is challenging, Open Trading is significantly differentiated from any other way of conducting trades in the high-yield market or elsewhere. And anecdotally, you’ll hear stories of challenges in inventory, in the leverage loan market, in the high-yield market that creates constraints around balance sheet for secondary trading and the high-yield market, I just think is another data point that shows that we have a unique solution for liquidity through Open Trading that people are not able to find elsewhere. And I think that just positions us great for market share gains for many years to come because of the investments that we have made there.
Kyle Voigt: Thanks, Rick.
Operator: The next question is from Gautam Sawant with Credit Suisse. Your line is open.
Gautam Sawant: Good morning, Rick, Chris, and Chris. I had a quick question on RFQ-hub. Can you provide us an update on the build out of that platform and how we should think about incremental future volume contributions from the ETF channel?
Richard McVey: Sure, happy to take that one. So RFQ-hub, just a reminder, it is owned and operated by Virtu and I don’t want to jump ahead of their earnings call on activity levels for RFQ-hub. We are excited about what we’ve seen thus far from RFQ-hub and our investment in RFQ-hub and the year that it had in 2022 just in terms of client activity, client engagement, and the work we’ve been doing with the partners in RFQ-hub, both our dealer partners and obviously BlackRock as a key partner as well. We do think the demand for fixed income ETFs by our institutional clients is climbing. It’s a wonderful vehicle for dealing with capital flows to get exposure to the overall credit market quickly and through a liquid instrument. So we’re seeing heightened levels and heightened demand from our client base on fixed income ETFs and expect that to continue, particularly given the activities in 2023 and the attractiveness of the fixed income market as an investment vehicle going forward.
So we’re very happy about the overall opportunity that the ETF market provides us through our investment in RFQ-hub.
Gautam Sawant: Thank you. And just as a follow up question, I wanted to circle back to the commentary around fee per million. You’ve said that in the deck it’s up Corporate Bond Index duration is up 6% from the lows of October. Have you seen that trend kind of continue into January with some of the new issuance changes in the marketplace and some of the trading dynamics changing?
Chris Concannon: No, the index itself has been relatively stable to the exit rate that we saw in December.
Gautam Sawant: Got it. Thank you.
Chris Concannon: Yep.
Operator: The next question is from Alex Blostein with Goldman Sachs. Your line is open.
