Fixing Fixed Income Management with Comprehensive High-Quality Data

Fixing Fixed Income Management with Comprehensive High-Quality Data

31 Mar 2025 4 minutes

Bond prices can fluctuate dramatically from one day to the next in turbulent markets. Monitoring any and all market events or corporate actions, such as default, early redemptions, or credit events, is crucial. Read in this blog post why choosing a fixed income data provider with near universal coverage and hallmarks of superior quality and high accuracy is paramount.

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Unlike stocks, which trade on centralized exchanges with clear, standardized pricing, bonds are part of a vast, fragmented marketplace where pricing, risk, and portfolio valuations depend on a complex web of financial data. This comes with a number of challenges.

The Complex Nature of a Bond’s Lifecycle

Every bond has a lifecycle, and at each stage, data determines how it is valued, traded, and ultimately managed. When a bond is first issued, its fundamental details – credit rating, coupon structure, maturity date, and even unique identifiers like ISIN or CUSIP – determine how it’s classified and traded. But bonds aren’t like stocks; they don’t have a central ticker symbol or a single price. 

What Is the Actual Price of a Bond?

Because bonds primarily trade over-the-counter rather than on centralized exchanges, their prices are derived from dealer quotes, making them far less transparent than stock prices. Price discrepancies exceeding 10% across various data providers are not uncommon, posing significant challenges for institutions trading at scale.

Market conditions, liquidity, and macroeconomic factors all influence bond yields and spreads, yet discrepancies between data sources can make it difficult to determine the true value of a bond. Hedge funds and brokers monitoring execution quality must reconcile multiple price sources, and without reliable pricing, trades can be miscalculated – leading to suboptimal investment decisions.

You Need Depth and Quality to Validate Your Bond Portfolios

Beyond trading, fixed income data plays a crucial role in your ongoing management of bond portfolios. Corporate actions such as coupon payments, early redemptions, restructurings, and credit events affect the valuation of bonds over time. For custodians and asset managers handling large portfolios, tracking these events is essential.

If an investor isn’t notified that a bond they hold has been called early, they may project incorrect cash flows and make poor reinvestment decisions. On top of that, regulators require financial institutions to report fixed income holdings accurately, and missing or inconsistent corporate actions data can create compliance risks that result in fines or legal issues.

Fixed Income Products and the Risks of Flawed Reference Data

Even after a trade is settled, operational risks remain. Custodians and clearinghouses rely on precise reference data to process transactions. If settlement dates, accrued interest calculations, or counterparty details are incorrect, trades can fail or be delayed disrupting liquidity. For institutions processing thousands of trades, even a small percentage of errors can lead to significant inefficiencies, higher costs, and regulatory scrutiny.

5 Points You Need to Have a Look at to Improve Your Fixed Income Data Management

Despite the enormous size of the fixed income market, the data underpinning it is often inconsistent, incomplete, or difficult to access. For you as an institution managing large portfolios, this presents real challenges described above.

Solving these challenges requires an advanced take on how fixed income data is sourced, structured, and delivered. Make yourself aware of these five important aspects:

  1. High-Quality Reference Data
    The data needs to cover every security feature, from coupon structures to redemption terms, in order for the bonds to be trackable throughout the bond lifecycle. This must include key events such as coupon restructure, default, and early redemptions.

  2. Comprehensive Global Coverage
    Comprehensive global coverage ensures that every bond – whether a US Treasury, a corporate bond in an emerging market, or a structured debt instrument – has complete, accurate data. This coming from one single data provider reduces inconsistencies based on different sources.

  3. Clear Data Provenance
    Data must be fully traceable, linking back to original bond prospectuses, term sheets, and regulatory filings to provide complete transparency. Without this audit trail, you can’t verify the accuracy of the data you and your investors rely on.

  4. Seamless Integration
    Technology also plays a role. Outdated manual processes contribute to inefficiencies, especially in trade reconciliation and settlement. Modern, API-driven data delivery allows you to integrate bond data seamlessly into your risk models, trading platforms, and regulatory reporting systems – without relying on time-consuming manual updates.

  5. Flexible Service Models
    Instead of being locked into rigid, costly licensing agreements, you need flexible access to data that aligns with your specific needs, eliminating unnecessary costs while ensuring scalability. A company tracking corporate bonds, for example, shouldn’t be forced to pay for municipal bond data it will never use.

Better Fixed Income Data Benefits Investors, Too

For individual investors, the impact of better fixed income data might not be immediately visible, but it’s profound. More transparent pricing means greater confidence in bond valuations. More accurate corporate actions tracking ensures fewer surprises in bond ETFs and mutual funds. And more reliable risk assessments help investors understand how fixed income fits into their broader portfolios.

Fixing fixed income isn’t just about making data better for you as an institution – it’s about making bond markets more transparent, efficient, and accessible for everyone including your clients.

Comprehensive Fixed Income Management with the Flexibility You Need

SIX has brought together reference data, corporate actions, and pricing into a seamless and flexible fixed income data solution. With comprehensive global coverage, including US municipal, corporate, and government bonds, as well as structured products, we provide in-depth insights into over 4 million fixed income instruments – delivering the data you need, when you need it.

More Information on Fixed Income Data by SIX

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