The Credit Mosaic: A unified approach to the future of trading

Hello making sense listeners. Today's conversation features Olivier Cash Cashfinger and Nick Dragna. Together they unpack the evolution of IG credit markets and how JP Morgan's global franchise supports clients. Through JP Morgan Markets, our digitized platform, institutional clients can access the firm's full offering across the entire trading life cycle. From idea generation and execution to post-trade analysis and ongoing insights. For more markets podcasts, please visit jpm. com. Making sense will return to its regularly scheduled programming in the next episode, but for now, enjoy this special episode from JP Morgan Markets, the credit mosaic. Hello everyone and welcome to the JP Morgan podcast series available exclusively on JP Morgan markets. I am Olivia Cashfinger, head of global IG, public finance and cohead of alternative trade sales here at JP Morgan. Today I'm pleased to be joined by my colleague Nick Adrella, head of global investment grade and macro credit trading. Nick, welcome to the podcast. — Thank you for having me. I'm pleased to have you join me to discuss the evolution of the credit market and also how our global franchise is supporting our clients through the expected volatility this year. So Nick, to kicking things off, can you set the scene for us? What were the thinking behind creating this global investment grade and macro trading unit a few years ago? And how has this changed the way we serve our clients? Olivier, do you mind if I call you cash during this podcast because that's how we uh normally address each other? — I'll be absolutely pleased because I don't really know who you are calling when you say holiday. — Okay, great. So, uh Cash, thank you very much. 3 years ago, we created the global investment grade and macro credit trading business under my supervision to better deliver our platform and flow credit trading to our clients. The thought was we wanted to knock down walls between the businesses globally and the businesses within global credit trading. The idea was to bring investment and macro credit trading together as one business line. So the risk and balance sheet of the entire global business is considered whenever a trade comes in and we price it or for idea generation for our clients. We believe this structure would give clients more transparency across products globally uh resulting in better execution and helping them to achieve their investment objectives more efficiently. Since then, we've done a massive talent overhaul as well. We've added 25 new risk takers across our investment grade and macro credit trading teams. We did this through key external hires as well as promoting internal. We've also built out our systematic credit trading strategy led by Peter Grant. This strategy consists of 40 people in four different countries and is eor ecosystem across all businesses. They are responsible for our algo, ETF and portfolio trading businesses. Well done. Impressive. Uh I need to say so from what you have built and from your perspective what have been the biggest surprises or learning when you started to integrate risk and this balance sheet globally and how has this impacted the way you have been transacting and innovating with our clients. — So I think one of the biggest surprises how unique our approach is. Uh traditionally we had a very hightouch business uh big platform big primary business big research effort and within the last few years we've created this systematic predator trading business and now we are marrying our high touch and low touch businesses together globally. This has given us very strong gains in market share client ranks and how we have served our clients over the last few years. For the full year of 2025, we traded 500% more volume via portfolio trading than we did in 2022. That outperformed the growth in the market, even as the competition has grown fiercely in that part of the market. In ETF primary, our presence has grown by 600% since 2022, while the AUM in fixed income ETFs has only grown by 50%. In our ALGO book, in US high grade, we now price over 10,000 QIPS with sizes up to 10 million. And in US high yield, we price 2,000 QIPS with sizes up to two million. Integrating risk and balance sheet globally has allowed us to be more nimble, deliver better pricing and idea to our clients, and ultimately innovate faster and more effectively for our clients. So cash, let me flip it and ask you uh a few questions right now. From your side in sales, how have client needs evolved in the last few years and how is our approach adapting to client needs? So it's definitely be a fast evolving investor base and if I had to sum it up I would say that the credit market has become the mosaic uh more colorful more complex and more connected than ever before. The reason is

relatively simple. Over the last decade or I shall say over the last two decade the credit markets have become much richer and the fixed income offering is much more diverse. So the question was on the sales side, how do we adapt ourselves and make sure we have the right expertise and we definitely wanted to make sure that all the different agendas were being correctly treated meaning not being considered as a hobby was an option. So as a result we have moved towards more specialized coverage and more regional uh coverage. What does that means? That means we have now developed specialized sales team on alternative credit sales, on solutions, on derivatives, on macro credit, on financing. We have now more touch points and more specialization whenever we engage our clients and this focus on client touch points has in my view made a big difference over the last few years. — Got it. I agree with you there on the big difference. um how are clients responding to our new product offerings and PT capabilities and how does the integration of IG privates and alternative credit fit into our core agenda? — Yeah, clearly the IG private is a hot topic right now. But let me answer the question uh in a very simple way. Clients are hungry for innovation and portfolio trading is definitely the glue holding it all together. Clients have been very receptive when it came to innovation. The more complete our product offering becomes, the more we have been able to address the strategic question our clients had. It's hard not to mention the key role the PT business now represents in our ecosystem. A few years ago, we took the view sales, trading, structuring, research took the view that the portfolio agenda would become a more cross asset play and we have collectively worked toward that objective. Your trading team, Nick, is working closely with all the different trading businesses within JP Morgan, the securitized products, uh, trading business, EM, MUN, CLOS's to make sure we can deliver the full spectrum of products to our clients. Our cross asset capabilities in portfolio trading have made a real impact. We have closed decent number of successful transaction including not only IG but as I said Nuni SPG and even CLO PT isn't just a product it's a bridge between all these different asset classes and private assets as I mentioned are clearly a hot topic they are the new frontier and we have managed to integrate IG private and alternative credit in our offering and that has allowed us to offer even more customized solution as an anecdote The research team has also started to publish a fixed income cross product relative value monitor which is definitely helping us sales and traders to drive those discussion with our investors and we are finding that some of our investors are just increasingly fixed income agnostic. So Nick uh on the trading side can you discuss and walk us through some examples of innovation you have implemented in your business? — Yes I think there are a few key things to highlight. Vita which is our electronic trading platform where clients can come into us with a portfolio that is their own portfolio and we will give indicative pricing on that instantly. Your inquiry is kept private. We don't see which way you were going, what bonds were selected. Or you can also select where we construct a portfolio with you. For example, you could say I want to buy triple B's and sell double B's. This is the size I want to do it on. These are the metrics that we want to fit our portfolio. And we will then have a portfolio that is sent back to you with indicative pricing on it, which is also kept private. JP Morgan direct is another thing that we have worked on where this is a venue where you do not meet us on a trading venue, you meet us directly. By meeting us directly, you avoid transaction costs, better execution, and you get to protect your data. Lastly, I would say and probably most importantly, we're systematically incorporating AI across all of our credit trading businesses, and it's fundamentally changing the way we operate. In our single name CDS business, we use AI to generate earning summaries for non-covered names and to auto build analytics such as trackers and monitoring tools. In our systematic and portfolio trading business, we have automated complex workflows and unify real-time data such as news flows, client flows, pricing to surface signals and free traders to focus on strategy increasingly embedded AI into pricing and algos. In our macro credit trading business, we're launching our QSCT program, quantitative signals for credit trading, a systematic modeldriven signal platform for credit indices and options

to identify alpha opportunities. Cash, what has been the impact of VA and JP Morgan Direct on our client engagement? So, yes, Nick, your description of VA was perfect. It has definitely been a very impactful tool for our franchise. Definitely a game changer. Our clients have been abboarding that tool globally. We have clients in Asia. Europe. We have clients in the US, in the Middle East now as well. It has been a proper success and there is more in the pipe because the team is working on adding new features and new solutions to that product. Uh on direct connectivity, I fully subscribe to what Nick said. I will just add a couple of data which are very telling. 16% of our e- trading flow is now going through direct connectivity volumewide and from a ticket count it's up to 26%. So it's real. Finally I would say that more generally the credit business sales and trading has invested a lot over the last few years for two main reasons. one to help sales to be more efficient and targeted in their client approach and secondly to improve the client experience when investors are engaging us. Got it. Um Cash earlier you mentioned that our credit offering was richer. You and I are regular on the road. Um we spend a lot of time together in the US, Europe and Asia. Where do you see our global footprint making the biggest difference for our clients? — So it's a great question. On top of having the joy of traveling all over the world with Unique, uh we have had a lot of different good discussions with our investors over the last few years. I think one of the main takeaways of our various trips has been the confirmation of the structural shift in terms of demand from insurance money for credit both public and private assets. That's undeniable. But it's fair to say that most of the supply available is in USD while the demand is global. Look at the hyperscalers. It's a big topic in our markets. For example, Alphabet recently brought the largest selling trade ever, even printing a 100redyear maturity. And this issuance represented 10% of the annual primary supply in sterling. But this non USD issuance isn't sufficient to satisfy the growing global demand. Our global reach let us connect the dots bringing expertise from every region and offering a toolkit that is as broad as our client ambitions. Bontier repacks forward CLN and others. Got it. What role do you see AI and data analytics playing in the future of credit sales and trading? — So Nick you touch upon that point earlier on uh with uh the research angle. I guess it's the same on our side. AI is definitely enhancing our capabilities and client service and we are definitely obviously continuing to invest in that in technology and we will be able to offer more targeted and efficient solutions to our clients. On the sales side, there is a lot of work being done on the automation as we want to be faster and more efficient in our market protocol and again it helps to improve the client experience for our investors. I think one example I want to uh highlight when it comes to AI is we have been building tools that let us screen for the top access the trading teams have and send tailored emails with only a click. It's about speed, precision and making every client interaction card. So now Nick, what are the biggest opportunities and challenges for our client for 2026 and how are you going to help them navigate the volatility? I think the opportunity is going to be spreads are starting at a very tight level. There seems to be volatility underneath the surface even though the index has really not moved that much on the year. At the end of the day, market and credit views and credit calls is what is going to pay the bills and lead to performance. However, transacting in large scale having certainty and execution is going to make these transactions more seamless and help people get risk on in faster and more efficient ways. I think the biggest opportunities lie in innovation and differentiation, continuing to expand with our product offering, investing in technology, delivering clitoriented solutions. The main challenge will be navigating market volatility while we are trying to implement all of these business practices into the business. I would note that in 2025 during liberation day everyone speaks about when the market gets volatile the algo will shut down portfolio trading will get slower and it won't be efficient. I think this was the first time when there was market volatility that the market the ecosystem actually became more efficient and volumes doubled across portfolio trading ETFs and I think that

will give the buy side more confidence in transacting when there is volatility cash what is your vision for the next phase of innovation in our business we've come a long way really fast where do you see going from here — well I think the moto will be the same to push boundaries is to get out of your comfort zone challenging the statric. We need to stay client focused and agile because this is the only way to drive success for both our clients and our business. To wrap it up now, Nick, why do you think our clients should call JP Morgan? — We combine our first class franchise in hightouch trading with our newly formed top systematic trading business. We leverage the strengths of both through our collaboration and consensus driven culture. Our unmatched access to balance sheet gives us a structural advantage in pricing and portfolio trades and risk views, especially as the breadth of the IG and how your market continues to grow. — Perfect. Thank you all for listening to the JP Morgan postcast series. We hope you found today's discussion insightful. For more information or to connect with our team, please visit JP Morgan Markets. The views expressed in this podcast may not necessarily reflect the views of JP Morgan Chase and Co. and its affiliates together JP Morgan and do not constitute research or recommendation advice or an offer or a solicitation to buy or sell any security or financial instrument. They are not issued by research but are a solicitation under CFTC rule 1. 71. Reference products and services in this podcast may not be suitable for you and may not be available in all jurisdictions. JP Morgan may make markets and trade as principle in securities and other asset classes and financial products that may have been discussed. The FIC market structure publications or to one newsletters mentioned in this podcast are available for JP Morgan clients. Please contact your JP Morgan sales representative should you wish to receive them. For additional disclaimers and regulatory disclosures, please visit www. jporggan. com/disclosures. Copyright 2026 JP Morgan Chase and Co.