Fixed Income Continues Its Hot Streak in the US and Canada

With market uncertainty continuing, investment in fixed income funds seems like a common sense approach. So, new hiring in the space remains fast and furious. Mizuho Securities USA, the U.S. broker-dealer sub of Mizuho Financial Group, announced an expansion of sales and trading, with top level appointments in fixed income. Cantor Fitzgerald is in the midst of launching an ETF arb business, including fixed income ETFs.

But for those looking for some of the biggest opportunities on this side of the Atlantic, it might help to look to the Canadians. Sell side investment is particularly strong in Canada, with a big ramp up in hiring as a result. According to data from Greenwich Associates, Canadian fixed-income volume increased approximately 12 percent from 2010 to 2011, attributed to an inflow of investments from domestic and foreign financial service firms.

For now, RBC Capital Markets remains the industry leader in institutional market trading in Canada, with BMO Capital Markets, Scotia Capital, TD Securities and CIBC filling out the ranks, according to data from Greenwich Associates. Also rans, working to close the gap, include Desjardins Securities, Laurentian Bank Securities, Casgrain and National Bank of Canada.

The Greenwich Associates report cites a "foreign invasion" from the likes of Barclays Capital, as they add senior level hires. Non-domestic fixed income trading is showing a pickup among HSBC and Credit Suisse.

But surprisingly, despite the rally in fixed income, a consistent launch of new fixed income funds and the need for personnel, there are predictions that salaries are still set to decline for many in the space. eFinancialCareers reported that fixed income banking professionals could see incentive-based pay drop from 20 percent to 30 percent this year. Morgan Stanley is just one player set to slow the growth of pay for traders on the fixed income side, especially given less than stellar returns.