Transaction cost analysis is becoming increasingly important for European fixed-income fund managers following pressure from regulators and clients to reduce costs or make charges more transparent.

Alpha Portfolio Advisors, an independent German investment consultant, surveyed 11 European fund management houses looking at transaction costs for bonds. It found that on average a round-trip buy and sale of European corporate bonds incurs transaction costs of 17 to 18 basis points. Choice of broker does not have a big impact on the cost, neither does using an electronic trading platform.