Sourcing, allocating, and trading fixed-income securities has historically been an analog process but a startup says its new platform will “revolutionize” and change that for financial advisors and others.
YieldX, a Miami-based portfolio management software company founded in 2019, launched its first two products on Tuesday — YieldX Hub and YieldX API — that can serve as end-to-end or stand-alone fixed-income solutions for RIAs, broker-dealers, family offices, banks, and other companies.
"Fixed income capabilities like this were previously only accessible to large institutions with teams of analysts and traders, so we are extremely excited to bring YieldX to market and fill this technology gap," Adam Green, CEO of YieldX, said.
YieldX Hub is a software subscription that includes three applications: InPaas for building optimized portfolios using ETFs and closed-end funds; BestFit for constructing customized corporate and municipal bond portfolios; and AssetExplorer, a tool for searching, filtering, and sorting more than one million fixed income assets on the platform. Securities in AssetExplorer can then be added to a portfolio or watch list.
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The subscription is $10,000 per year for each user. At about $800 per month, Green said the company priced the service to be a “no-brainer” decision for companies to subscribe and that it has “some type of value proposition for every RIA.”
The YieldX API integrates the company’s software abilities into existing platforms.
Steve Gross, the president and chief innovation officer at YieldX, said the company has flipped the way investors think about investing in fixed income. Traditionally, investors start by spending time sourcing what they believe are the best bonds or funds, then they piece them together in client portfolios, Gross said. YieldX begins with client objectives then uses artificial intelligence software to recommend securities while accounting for yield, risk, and expenses.
The fixed income universe is expansive and YieldX aims to help advisors discover securities they didn’t know exist. “People don’t know they are there, they aren’t coming up on their screen. That’s becoming more and more important, especially as yields are going down in many areas,” Gross told RIA Intel.
Gross founded and was the chief investment officer of AlphaParity, a portfolio technology company and asset manager with $800 million, which Franklin Templeton acquired in 2017. In 2018, he met Green, who said the two “had alike minds in and round how fintech could solve for innovation in capital markets, specifically around fixed income.”
After 15 years in high-yield and leveraged finance, Green previously co-founded and was the chief strategy officer at MoneyLion, a lending and wealth management fintech company for retail borrowers and investors.
The two co-founded YieldX last year and have been working with private beta customers since June of this year. It has about 20 employees but plans to hire more who will be focused on product and engineering.
Venture capital investments in wealth management technology companies have tapered. But two weeks ago, YieldX raised another $5 million in seed funding from the same group of individuals, family offices, and institutions that invested $5 million last year, Green said.
Michael Thrasher (@Mike_Thrasher) is a reporter at RIA Intel based in New York City.