Key Takeaways
• U.S. asset managers are moving toward integrated cross asset execution strategies to manage risk in an increasingly fragmented and macro-driven market.
• There is growing demand for multi-asset platforms to replace fragmented trading tools and reduce ‘cognitive tax’.
• The Cortex platform provides this unified ecosystem, bridging the gap between previously separate market segments to streamline cross asset execution.
In an era defined by geopolitical fragmentation and the blurring of traditional market boundaries, changes in trade policy, energy markets, artificial intelligence (AI) and monetary policy can affect equities, rates, currencies and commodities simultaneously.
For U.S. asset managers, assessing these forces through separate product lenses is becoming increasingly difficult.
This is contributing to a broader shift towards macro-driven investment strategies and more integrated, cross asset execution trading models, as U.S. asset managers seek a more complete view of portfolio risk.
Yet while investment strategies have evolved, much of the infrastructure supporting execution remains fragmented.
The result is growing demand for execution models that can connect markets, liquidity, data and workflows through a more unified experience.
The growing shift toward cross asset execution strategies
We have entered a market environment where forces that once appeared discrete – such as geopolitics, energy, trade policy and technology – are interacting to reshape the flow of capital and risk.
He adds “As a result, we are noticing more and more that our U.S. institutional clients are rotating staff across desks to build cross-asset fluency and reorganizing toward more macro-focused setups.”
These trends are also influencing how institutional investors select banking partners.
Industry trends
Coalition research suggests that some investors are concentrating more activity with a smaller number of strategic partners capable of delivering integrated execution, liquidity and customised solutions across asset classes, rather than maintaining numerous specialist manager relationships.
This shift is already evident in how asset managers are approaching FX with BNP Paribas.
BNP Paribas trends
A growing number of U.S. investment firms want to reduce the cost and complexity of working across multiple platforms and liquidity providers. By connecting directly with BNP Paribas through an API interface, alongside using Cortex, they are able to remove an intermediary, reducing costs for both sides. This workflow also allows BNP Paribas to provide customized, complex solutions to meet their FX needs, streamlining client’s FX activity and creating a more integrated relationship with a strategic banking partner.
Why cross asset execution thinking matters
Three structural changes are reinforcing this shift.
Navigating fragmented markets
First, the move from globalization toward greater economic fragmentation is creating a more complex market backdrop. Industrial policy, trade restrictions and the reorganisation of supply chains can produce different outcomes across regions and sectors.
Geopolitical risk at the forefront
Second, geopolitical risk has become more central to market behaviour. Investors increasingly need to understand how political developments may ripple through domestic equities, rates, commodities and foreign exchange rather than treating them as isolated events.
Traditional diversification is changing
Third, traditional diversification assumptions have become less dependable. As the correlation between U.S. equities and treasuries fluctuates, the traditional 60/40 model is losing its efficacy, driving U.S. investors toward global, macro strategies to find true diversification.
For investment banks, that creates both a challenge and an opportunity
The challenge of cross asset execution strategies
While trading strategies have evolved significantly, the ‘plumbing’ of the financial markets has struggled to keep pace.
For the modern macro trader, the need to pivot between different digital environments imposes a ‘cognitive tax’, where a lack of interface familiarity and interconnectedness between asset classes may create operational risk and undermine the efficiency required for rapid execution in volatile markets.
The opportunity: from standalone tools to an integrated ecosystem
BNP Paribas has been evolving its Cortex platform from its origins in foreign exchange into a broader multi-asset execution ecosystem spanning fixed income, equities, commodities and listed products.
What began more than a decade ago as a specialized FX execution platform has matured into Cortex – a unified, multi-asset ecosystem designed to bridge the gap between previously separate market segments.
The objective is not to make every market behave in the same way. Instead, the aim is to provide a more consistent experience across those markets, reducing unnecessary friction while preserving the specialist tools and execution logic that each instrument requires.
“By integrating fixed income, equities, commodities and listed products within a cohesive architecture, we are addressing the need for operational alpha – the ability to execute complex, cross-asset mandates with greater consistency and reduced friction,” Razaq adds.
For example, BNP Paribas has seen a pattern of large U.S. investment firms managing a high volume of FX activity in-house through individual RFQs and manual processes, creating greater complexity and inefficacy. By consolidating activity with BNP Paribas and utilizing the REX 5th gen complex algorithm for netting, automated rolls, and allocations, firms can simplify workflows and increase automation while meeting regulatory and TCA requirements – significantly reducing operational risk.
Bridging listed and OTC liquidity
The relationship between listed derivatives and over-the-counter markets provides another example of this shift.
Futures can offer important benefits in areas such as transparency, margin management and credit efficiency. However, asset managers may also encounter liquidity constraints or price slippage in exchange-traded markets, particularly when executing larger or more complex orders.
At the same time, OTC markets can offer access to different or deeper sources of liquidity, but through a separate workflow.
“We are witnessing a strategic pivot among U.S. asset managers as they increasingly search for deep OTC liquidity to navigate more complex market regimes,” says Condon.
This broader industry shift is also reflected in recent CME analysis, which points to a growing demand for more flexible access to liquidity across listed and OTC markets.
BNP Paribas has developed an Exchange for Related Position workflow designed to bridge those two environments. The solution allows clients to initiate a request via a futures algorithm, which is then converted into an OTC order to source optimal pricing through BNP Paribas’ core algo suite, Cortex iX, before converting it back into a futures contract for final settlement.
The aim is to combine the operational advantages of futures with access to additional liquidity, while maintaining a transparent and auditable end-to-end workflow.
For U.S. asset managers, this type of connection between markets can be particularly important as capital, margin and execution efficiency become more central to overall trading performance.
The future of cross asset execution
While cross asset execution will not remove the need for deep product expertise, the opportunity lies in allowing those specialists to operate within a more connected framework.
For U.S. asset managers, this is likely to become increasingly important as geopolitical fragmentation, changing correlations and evolving regulation continue to reshape portfolio construction.
Markets are already behaving as an interconnected system. The next stage of execution technology will be determined by how effectively trading infrastructure reflects that reality.
FAQs
What is cross asset execution or multi-asset execution?
Cross asset execution (or multi-asset execution) is an integrated trading approach that manages multiple asset classes – such as equities, rates, FX, and commodities.
What is EFRP?
Exchange for Related Position (EFRP) is a workflow designed to bridge listed and OTC markets. It allows clients to initiate a request via a futures algorithm, convert it to an OTC order to access optimal pricing/liquidity, and then convert it back into a futures contract for settlement. It is a set of techniques that model a portfolio as a graph where nodes are assets and edges represent dependencies, allowing managers to visualise and quantify hidden risk concentrations.
What is REX?
REX is BNP Paribas’ latest 5th generation algorithm – a complex algo enabling clients to algorithmically execute a portfolio or basket of orders, instead of just a single order or currency.
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