Brennan declined to say whether Vanguard, the Valley Forge, Pennsylvania-based firm that pioneered the index mutual fund in the 1970s, routes trades through IEX.
“If a venue is a good one for us to trade in, we would absolutely use it,” he said. “If a particular market participant improved market structure, we would welcome it.”
Capital Group, whose American Funds unit runs the $142 billion Growth Fund of America and is the third-biggest U.S. mutual fund family, uses IEX for some trades and helped start the company by investing the firm’s own capital in it.
“If in the modern market structure you see a better way to do things, you do it,” Chuck Freadhoff, a spokesman for the Los Angleles-based firm, said in an interview. He declined to say what portion of Capital Group trades are directed through IEX.
‘Price Dislocation’
Scott Glasser,co-chief investment officer at ClearBridge Investments, said in an online commentary his firm doesn’t try to compete in “millisecond-sensitive trading activity.”
“We look to take advantage of price dislocation due to high-frequency trading where we can, and take steps to try and protect our clients’ assets from predatory trading activity where necessary,” Glasser wrote in an April 1 note posted on the firm’s website.
ClearBridge, with about $90 billion in assets, is the largest stock investing unit of Baltimore-based Legg Mason Inc.
The new exchange’s success hinges on investors persuading their Wall Street intermediaries -- brokerages such as Goldman Sachs Group Inc. and Morgan Stanley -- to send their stock orders to IEX. For its part, Goldman Sachs endorsed it in a memo to employees last month and is the biggest broker on the platform, according to IEX.
Preferred Venues