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Intrinsic Value is all-important and is the only logical way to evaluate the relative attractiveness of investments and businesses.
Good morning and welcome to the Tradeweb's Fourth Quarter 2021 Earnings Conference Call. As a reminder, today's conference call is being recorded and will be available for playback. To begin, I'll turn the call over to Head of Treasury FP&A and Investor Relations. Ashley Serrao, please go ahead.
Thank you. And good morning. Joining me today for the call is our CEO, Lee Olesky, who will review the highlights for the quarter and provided business update. Our President Billy Hult, who will dive a little deeper into some growth initiatives and our CFO, Sara Furber, who will review our financial results. We intend to use the website as a means of disclosing material, non-public information and complying with disclosure obligations under SCC Regulation FD. I'd like to remind you that certain statements in this presentation and during the Q & A may relate to future events and expectations, and as such, constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Statements related to, among other things, our guidance, are forward-looking statements. Actual results may differ materially from these forward-looking statements. Information concerning factors that could cause actual results to differ from forward-looking statements is contained in our earnings release and periodic reports filed with the SCC.
In addition, on today's call, we will reference certain non - GAAP measures, information regarding these non - GAAP measures, including reconciliations to GAAP measures are in our posted earnings release and presentation. To recap this morning, we reported GAAP earnings per diluted share of $0.23, excluding certain non-cash stock-based compensation expense, acquisition-related transaction costs, acquisition Refinitiv related D&A, and certain FX items, and assuming an effective tax rate of 22%, we reported adjusted net income per diluted share of $0.42. Please see the earnings release and the Form 10-K to be filed with the SEC for additional information regarding the presentation of our historical results. Now, let me turn the call over to Lee.
Thanks, Ashley. Good morning, everyone. And thank you for joining our Fourth-quarter earnings call. I remember sitting here one year ago with a growing sense of optimism, that we were returning the corner on this pandemic. As with most things in life, curveballs get thrown your way. And I'm extremely appreciative of the continued hard work by all our healthcare and frontline workers and scientists, that continue to adapt to the changing environment. Uncertainty and change create opportunity. As I highlighted last year at this time, we were given the opportunity to help our clients seamlessly shift their workflows to a virtual street environment and to demonstrate how electronic trading solutions could be mutually beneficial. Tradeweb's importance as the critical marketplace was evident in March 2020, when we helped our clients trade a record-breaking $1 trillion an average daily volume as volatility skyrocketed.
Fast-forward to '21, it's been an amazing to see us record seven months during which trading activity actually surpassed March,2020, despite the extraordinary global monetary policy that muted volatility across asset classes. This is not only a reflection of the acceleration and electronification, but also a testament to the relentless innovation of our business leaders and our 350 plus technologists who engage with our clients every day. It is also a reflection of our deliberate strategy crafted over 25 years, where we've dynamically made investments across asset classes, clients, and protocols to advance market structure and the overall Electronic Trading Ecosystem. Today, we are not reliant on one asset class, client tape or geography. And we continue to build an increasingly diversified business that leverages the investments we've made over time. This connected DOD strategy is still early in its evolution, and we believe we will continue to be an important differentiator as we help our clients navigate the trade life cycle. Turning to Slide 4, the strategy I just described was on display as we reported, the strongest fourth quarter in our history, hitting new market share and volume records across a number of products.
Specifically, revenues of nearly $277 million during the fourth quarter in '21 were up 18.8% year-on-year on a reported basis, and 19.9% on a constant currency basis. The revenue growth and the resulting scale translated into improved profitability year-on-year. As fourth-quarter adjusted EBITDA margin expanded by a 144 basis points to 50.6%. Turning to Slide five, this quarter was marked by strong performance across many of our asset classes with rates and credit accounting for 57% and 33% of our revenue growth respectively. Specifically, rates posted another strong quarter driven by healthy growth across U.S. treasuries and swaps. In cash rates, revenues were partially helped by a healthy central bank issuance, which continues to fuel government bond trading and the addition of NFI. Swaps produced another quarterly revenue record with strong market share growth while mortgage revenues declined slightly. Credit posted another strong quarter, driven by strong U.S. and European corporate credit trading.
Equities revenue growth was driven by institutional ETFs and our efforts to diversify and grow our other equity products. Money market performance was fueled by organic growth in institutional repo that overcame continued rate headwinds in the retail sector. Finally, market data saw a growth across our APA and proprietary data products. Turning to Slide 6, our strong fourth-quarter capital for record year in 2021. Record volumes across most asset classes translated into 20.6% and 19.3% revenue growth on a reported and constant currency basis, respectively. As a result we recorded our 22nd consecutive year of record revenues, breaking through the $1 billion revenue milestone for the first time. The scale generated by our strong top-line results drove approximately a 192 basis points of adjusted EBITDA margin expansion,24% earnings growth, and 31% free cash flow growth. And as our growth initiatives continue to scale, we maintained our tradition of consistent and focused organic investment. 2021 was a very busy year. In U.S.. treasuries, we closed our acquisition of Nasdaq's fixed income. Continued to onboard new clients and enhance our streaming offering. In IRS, we expanded our client base in APAC and our product offering with four new EM currencies, in credit we continue to drive innovation as we rolled out multi-client net spotting and enhanced our global portfolio trading offering and all trade functionality.
We also expanded our China bonds partnership with CFETS with southbound trading, in money markets, we added new repo collateral types and enhanced our tri -party repo offering. We believe our investments have not only positioned us well for the future, but also help to make '21 another banner year for Tradeweb. Moving to Slide 7, 2021 continued the streak of double-digit revenue growth, that we have worked hard to deliver for multiple years now. The diversity of our business was also on display. Today, while the majority of our revenue still come from rates, the majority of our growth actually comes from our other businesses. Credit was another highlight, accounting for 43% of our revenue growth in 2021. Regionally, we continue to see strong growth in our international business, which has grown revenues at an average of 21% since 2016 with growth accelerating to 25% in 2021, our international revenues are currently anchored by our European business. We believe Asia and more broadly emerging markets will continue to become a bigger component of our international growth story over the next few years.
We believe we have room to grow our network and cross-sell our procs. Broadly speaking, our EM strategy has been centered on playing to our strengths. We believe we have a strong position in IRS and CDS, a foundation that we have leveraged to launch and further expand our presence in the EMIRS and EMCDS. EM IRS volumes were up over 200% in '21. And we're seeing early, but substantial growth in EMC DS. We have also leveraged our leading position in China and portfolio trading to expand into EM, cash credit. We're still early in this journey and we'll update you as things progress. Relentless innovation has been critical to our success. Throughout our history, we have priced being first, which requires constant investment. In the last six years, we've invested over $400 million in technology to help shape the future of electronic markets. Growing those investments at an average of 12% since 2016.
And as our investments bear fruit, EBITDA margins have expanded nicely. Looking ahead, we expect '22 to be another investment year. While our investments remain heavily concentrated in rates and credit, we are optimistic about the durability of our growth across the business, given our market share gains, pipeline of innovations, and collaborative spirit that continues to be the north star for the company. Moving onto slide eight, let me provide a brief update on our four main focus areas. Our interest rate swaps and credit business saw a continuation of their multiyear growth story. Both businesses saw a record share in the fourth quarter as our efforts to increase. Client engagement with innovative solutions continues to pay off. With respect to credit, it is especially encouraging to see our success now spread to high yield. Longer term we remain excited by the growth potential for both these businesses. As our growth initiatives scale, electronification increases and the rate cycle turns. Billy will provide more color on the quarter and our strategy, momentarily. Turning to U.S. treasuries, another rates product that continues to perform well with volumes up 47% year on year, led by both the institutional and wholesale business and aided by our NFI acquisition. Market share rose to 18.7% of the U.S. treasury market.
The backdrop of healthy issuance continues to support the institutional channel and the pickup in volatility, aided the wholesale channel. Our share gains have been driven by existing clients doing more business and making further inroads into the T-bill market. Looking ahead, we continue to invest in driving the adoption of early-stage institutional streaming protocols like Tradeweb plus. The wholesale NFI integration is going according to plan. We've made progress on migrating several back and middle office functions related to trade and billing and we're currently preparing for the broker dealer consolidation. Finally, within equities, institutional ETFs produced a healthy quarter with average daily volumes up 32% year-on-year as new client wins and healthy industry volumes helped drive the growth from the quarter. During the quarter, equity ETFs comprised 62% of our global volume with fixed income contributing 32%. Our other initiatives to expand beyond our flagship ETF franchise are also bearing fruit with momentum continuing in equity derivatives. Revenues were up double-digit year-on-year.
Looking forward, we believe we remained well positioned to benefit from the continued growth in ETFs globally. And as our growth initiatives scale. We believe the secular trends powering the growth of electronic trading remain intact. As we exited '21, and in the first month of this year, we also saw the return of debate in financial markets. We believe we are in a great position to help our clients as they navigate a higher volatility environment given our global footprint and our ability to stitch together different asset classes and different liquidity pools. With that, I'll turn it over to Billy.
Thanks Lee. As we build markets at Tradeweb, we think deeply about all the pieces of the puzzle. Most important pieces, how our product leaders and technologist engage and collaborate with clients to create win-win solutions. Relationships have always been important in fixed income, and recognizing that has allowed us to lead and have interesting and candid conversations about the evolution of trading from a relationship business to an experienced business. Empowering our clients with innovative technology to complement their relationships, so that they can deliver or discover the best prices has been key. Ultimately, the constant challenge of creating a richer trading experience has been tables stakes to the way we compete. Our strategy is working and clients have responded to our engagement by pushing credit and swaps volumes to record highs at Tradeweb. Turning to Slide 9 for a closer look at credit, we produced another very strong quarter with both IG and high-yield hitting new records for market share, capping off another record year for credit to share gains are a testament to the growing network we're building.
And the innovations we continue to bring to the market to solve client pain-points. As Lee mentioned, 2021 was no different with the roll out of multi-client net spotting and further enhancements to our portfolio trading and Alltrade offerings. Looking forward, our formula remains the same. Collaborate and innovate to help our clients save time and money. Turning back to the fourth quarter, clients continue to respond to our brand of innovation with healthy adoption across AllTrade portfolio trading and net spotting. RFQ, our biggest institutional protocol and revenue contributor produced another healthy quarter with average daily volume up 15% year-over-year. The strong institutional growth was supported by our fast-growing wholesale business, which had a record quarter. While we are pleased with diversity of our growth, we strongly believe we have the potential to do even better as retail conditions start to improve, as interest rates increase. Portfolio trading continues to shine bright, reaching our record percentage of industry volume in November as volatility increased. A testament to the utility that portfolio trading provides for the market. A few years back, our focus was primarily on the ETF ecosystem, where large asset managers were doing block size trades with a handful of liquidity providers.
Today portfolio trading has become a key factor in improving execution quality and liquidity for the buy-side. One considerable advantage of portfolio trading is extremely high hit rates. Clients tend to construct their portfolios with the aim of trading one piece of risk and as a result, hit rates on the platform are around 95 with relatively similar hit rates for illiquid bonds. Tradeweb facilitated $78 billion in portfolio trades in the fourth quarter of 2021, an increase of more than 35% year-on-year. This capped off a record year where Tradeweb helped clients execute over $300 billion in portfolio trades. Clients are also increasingly putting dealers in competition, our in-comp portfolio trading reached record levels comprising 89% of portfolio trading volumes up from 54% in the fourth quarter of last year. The strength in portfolio trading was matched by the rapid growth of our anonymous liquidity solution AllTrade, which saw a record $98 billion in volume in the fourth quarter of 2021, an increase of nearly 50% year-over-year. We continue to invest in our all-to-all network by enhancing dealer RQ, integrating AIX, and improving responder functionality.
We will continue to develop our session trading liquidity pool, which has proven to be a great tool for dealers to manage their risk, especially after executing a portfolio trade, and our newer rematch protocol, which continues to scale. Finally, our advanced net spotting offering, which leverages our deep U.S.. treasury liquidity pool, saw another solid quarter with over $82 billion in volume though volumes were down 5% year-over-year. More importantly, the number of users utilizing net spotting was up 34% year-over-year. The lower volumes were driven by lower electronically processed activity, which tends to have larger trade sizes and a flatter yield curve that reduced the need to actively hedge. Turning to the rest of our credit business, our European credit and institutional union revenues each grew over 20% year-over-year, while our CDS revenues also saw a healthy double-digit year-over-year growth. In some, our strategy of attacking the entire market is succeeding. And we believe that this diversity across product, protocol, geography, and client type provides us with tremendous room for growth. As we look ahead, we are excited by our road map to drive innovation across the credit markets. Moving on to swaps, just like credit, the multiyear growth story continues as swaps registered a record quarter and a record year.
The higher volatility environment drove a 20% year-over-year increase in fourth quarter '21 industry volumes, both full-year volumes were still down 12%. Our variable swaps for revenue grew over 40% in the fourth quarter, and the full year, driven primarily by market share climbing to a record 17.7% with growing adoption of newer protocols. We believe our brand and swaps continues to get stronger. We are focusing on the things we can control. And we continue to collaborate with the marketplace to solve for more pieces of the puzzle. Integration is obviously a very big thing and we've been a leader around this across all our businesses. We are driving our market share higher by innovating across products, protocols, and geographies with international swaps, growth being a big area of focus. During the fourth quarter, we saw broad gains across our products and our momentum in major currencies continues with record share across all currencies. I wanted to spend a little time to give you an update on the LIBOR transition With the start of the year LIBOR for the Sterling, Swiss franc and Japanese Yen markets has been discontinued.
While the U.S. dollar LIBOR rate will be published until June 2023, no new risk can be added in 2022, Tradeweb has played a key role in ensuring this transition occurs seamlessly around the globe by helping clients move their portfolios and access liquidity in the new benchmarks. Around 85% of our most active clients are now using SOFR and just under 2/3 of all clients have done a software-based trade. Beyond the risk-free rate transition, we continue to respond to structural changes in the swaps market, making strong but early advances in cleared EM swaps, RFM protocol adoption and multi-asset trading. During the fourth quarter, we saw a record EM activity and we have more than doubled our quarterly revenue run rate from the beginning of the year. We also saw record RFM activity as we continue to onboard dealers and deepen our liquidity pool. Looking ahead, we believe the long-term swaps revenue growth potential is meaningful.
With the market still only 30% electronified, we believe we can actively collaborate with our clients to solve more pieces of the digitization puzzle, while the global fixed income markets and broader swaps markets grow. In the near-term, we believe the looming rate hike cycle also presents an attractive backdrop for the business. Finally, we continue to invest in our leading automated trading capability, AiEX. The number of AiEX trades grew by 21% year-over-year in the fourth quarter. Our most sophisticated clients are increasingly adopting this cable stake solution globally across asset classes. In fact, while trades were up 47% in 2021, average daily volume increased by 70% which is a sign of the growing client comfort in deploying AiEX for larger trade sizes. 2022 marks the 10-year anniversary of our AiEX rollout, yet we believe we are still early in overall client adoption. You've heard us talk in the past, about the move from the phone to the mouse, and then eventually, from the mouse to more optimal automated trading solutions. As markets get more electronic, new participants enter and we are actively seeing that happen in our swaps business with new systematic clients that utilize automated trading strategies. Looking ahead, we will continue to invest to provide more features and functionalities. As we strive to give our clients the best possible trading experience. And with that, let me turn it over to Sara to discuss our financials in more detail.
Thanks, Billy. As I go through the numbers, all comparisons will be to the prior year period, unless otherwise noted. Let me begin with an overview of our volumes on Slide 11, we recorded our highest fourth-quarter average daily volume of 1.1 trillion up 24% year-over-year, and up 12% when excluding short-tenor swaps. Areas of notable growth include global government bonds, swaps, U.S. corporate credit and institutional ETFs. Slide 12 provides a summary of our quarterly earnings performance. The fourth-quarter volumes translated into revenues increasing by 18.8% on a reported and 19.9% on a constant currency basis. We derived 37% of our revenues from international customers and recall that approximately 30% of our revenue base is denominated in currencies other than dollars predominantly in Euros. Constant currency growth was higher than reported given the depreciation of the Euro below the 2020 average rates. Our variable revenues increased by 26.1% and our total trading revenue increased by 20.3%. Total fixed revenues related to our four major asset classes continued to grow, up 9.7% and 11.1% on a constant currency basis.
Rates fixed revenue growth was primarily driven by the addition of the NFI acquisition, while credit fixed revenue growth was driven by European credit. Other trading revenues were down 1%. As a reminder, this line item does fluctuate, as it's affected by periodic revenues tied to technology enhancements performed for our retail clients. Market data increased by 3.8% due to growth in APA and proprietary data products. Adjusted EBITDA margin came in at 50.6% and expanded nicely by 144 basis points relative to fourth quarter '20 as we continue to benefit from scale. All in we reported adjusted net income per diluted share of $0.42. Moving on to fees per million on Slide 13, the trend I'm about to describe are driven by a mix of the various products within our four asset classes. In sum, our blended fees per million increased 1% year-over-year, primarily as a result of stronger growth in higher fee per million credit, mostly offset by strong growth in lower fee per million under one-year swaps, excluding lower fee per million short-tenor swaps and futures, our blended fees per million were up 12%.
Let's review the underlying trends by asset class starting with rates. Average fees per million per rates were down 6%. For cash rates products, fees per million were up 9%, primarily due to growth in higher fee per million U.S. treasuries. For long-tenor swaps, fees per million were fairly flat, primarily due to growth in EM swaps and RFM that was offset by lower duration. In other rates derivatives, which includes rates, features, and short-tenor swaps, average fees per million decreased 20% due to a reduction in OIS fees per million, which carry a lower fee per million from the products. Continuing to credit, average fees per million for credit increased 20% drilling down on cash credit, average fees per million increased 16% due to stronger growth in U.S. high-grade and high-yield, which carries a higher fee per million than overall cash credit. Our high-yield volumes were a record in the fourth quarter. Looking at the credit derivatives and electronically processed U.S. cash credit category, fees per million increased 7%, driven by growth in CDS fee per million.
Continuing with equities, average fees per million for equities was flat. For cash equities, average fees per million increased by 6% due to an increase in fees per million within U.S. and EU ETF. U.S.. ETF fee per million was driven by a decrease in volume per share traded. Recall in the U.S.. we charged per share and not for notional value traded. Equity derivatives, average fees per million decreased 17% due to growth in U.S.. derivatives, which carry a lower fee per million than the equity derivatives average. Finally, within money markets, fees per million decreased 1%. This was primarily driven by a reduction in our retail CD fees per million, which more than offset an increase in our Euro and U.S. repo fees per million. The higher fee per million retail money markets business remained pressured by the low interest rate environment.
Slide 14 details our expenses. At a high level, we continue to invest for growth. There has been no change to our philosophy here. Adjusted expenses for the fourth quarter increased 14.8% and 16% on a reported and constant currency basis respectively. Recall approximately 15% of our expense base is denominated in currencies other than dollars predominantly in sterling. Fourth-quarter 2021 adjusted operating expenses were higher as compared to 4th quarter 2020, due the increased employee compensation, G&A, technology and communication, and the inclusion of NFI. Compensation costs increased 21.8% due to higher headcount to support our growth, as well as higher performance-related compensation. Adjusted noncomp expense increased 2% on a reported basis as higher G&A and technology and communications were partially offset by lower professional fees and favorable movements in FX. Adjusted non-comp expense on a constant currency basis increased 6%.
Specifically, technology and communication costs increased primarily due to higher clearing and data fees as a result of growing AllTrade volumes in credit and streaming U.S. treasury volumes. In addition, this quarter also saw the continued impact of our previously communicated investments in data strategy and infrastructure. Adjusted general administrative costs increased primarily due to an increase in travel and entertainment as we gradually recover from the pandemic. Favorable movements in FX resulted in our $1.3 million realized gain in fourth quarter '21 versus an $800,000 realized loss in fourth quarter '20. Professional's fees decreased 8.4% due to lower legal and consulting cost partially offset by continued investment in data strategy and infrastructure technology. Slide 15 details capital management and our guidance. First on our cash position and capital return policy. We ended fourth quarter in a strong position holding $972 million in cash and cash equivalents and free cash flow reached nearly $527 million for the trailing 12 months. We have access to $500 million revolver that remains undrawn as of quarter end. CapEx and capitalized software development for the year was $51 million, an increase of 21% year-over-year, in line with our expectations.
With this quarter's earnings, the Board declared a quarterly dividend of $0.08 per Class A and Class B share. We spent a $147 million offsetting equity dilution during '21. Specifically, we spent $76 million under our regular share buyback program, leaving $74 million for future deployment at the end of the quarter. In addition, we withheld $71 million in shares to cover payroll tax obligations upon the exercise of stock options. As a reminder, we plan to use our share repurchase authorization to mostly offset dilution from ongoing equity compensation. Turning to guidance for 2022, we will continue to invest in 2022 and are expecting adjusted expenses to a range from $620 million to $655 million. The midpoint of this range would represent an approximate 11% increase, which is in line with our average expense growth from 2016 of 10%. We believe we can drive adjusted EBITDA and operating margin expansion compared to 2021 at either end of this range. As we [Indiscernible] described, we continue to invest for the future with credit and rates being key focus areas with a long runway for growth.
We are investing in introducing and driving new protocol adoption, launching new products, and expanding our geographic reach. Some of these investments will take some time to scale, but we continue to prize innovation and have a technology pipeline that continues to grow. We expect G&A expenses to ramp from fourth-quarter '21 levels through the course of the year as we increased T&E and marketing spend to drive client engagement. We expect technology and communication expenses to grow from fourth quarter '21 levels, driven by additional investments in data strategy and infrastructure. Additionally, we expect continued growth of credit Alltrade, and our U.S treasury streaming platform. For forecasting purposes, we continue to use an assumed non-GAAP tax rate of 22% for the year. We expect CapEx and capitalized software development to be about $62 million to$68 million. We estimate that approximately 60% will be spent on software development to support our growth initiatives, 25% will be related to growth CapEx, and 15% will be related to maintenance CapEx.
The midpoint of our CapEx guidance implies 27% year-over-year growth, which would be higher than our historical average due to opportunistic infrastructure enhancements. Excluding this, midpoint growth would be 5%. Acquisition and Refinitiv transaction-related D&A, which we adjust out due to the increase associated with push down accounting is expected to be $127 million. Finally, on Slide 16, we have updated our quarterly share count sensitivity for a first-quarter 22 to help you calibrate your models for fluctuations in our share price. Now I will turn it back to Lee. For concluding remarks.
Thanks, Sara. Nearly two years into this pandemic, I would say that we're all getting better at dealing with these curve balls. I'm especially proud of the Tradeweb team. We've not only adapted to this new normal, but also the excelled in it.2021 was another the record year marked by numerous milestones for the company and our products. Change creates opportunity and our focus on innovation and collaboration is the ethos of the company. Clients continue to embrace the potential of electronic solutions, and we are excited to invest alongside them. Part of change that we have historically excelled at is hoping our clients navigate regulatory change, and capitalizing on regulation as a firm. The network that we've built over the last 25 years has not only helped us get to where we are now, but is also positioned us to be on the front foot regarding market structure changes. At the end of the day, we have all the pieces in place. The network of clients, liquidity providers, the technology, suite of protocols, and third-party connectivity. This has helped immensely in creating a track record of making positive contributions to evolving regulation. Be it Dodd -Frank and the move towards SEF's MiFID II, or most recently, the LIBOR transition.
It's still early days, but we see the ongoing discussions in the U.S. Treasury market as yet another potential opportunity. We released January volumes this morning in the secular trends, powering electronification were showcased again as we started 2022 with strong momentum, having already facilitated more than 1 trillion in average daily volumes. Specifically, our January revenues were up double-digit versus January '21. January volumes increased over 7% year-on-year with broad growth across our four asset classes and new volume record for European government bonds and U.S. high-yield credit. In U.S. credit, we also hit a new market share record in Electronic U.S. high yield of 8.2% and grew our Electronic U.S. high-grade share by more than 200 basis points year-on-year to 12.3%. We believe the best is yet to come across all of our businesses, and we're excited about the innovation we can bring to the market over the next few years. We are extremely focused on capitalizing on the various growth opportunities ahead of us and continuing to strike the right balance between investing for the future and driving margin expansion to create long-term value for our shareholders.
I'd like to conclude my remarks by thanking our clients for their business and partnership in the quarter. And I want to thank my colleagues for their efforts that have contributed to our strongest fourth quarter in history and a record year for Tradeweb. With that, I will turn it over to Ashley for your questions.
Thanks, Lee. As a reminder, please limit yourself to one question only, feel free to hop back into queue and ask additional questions at the end. Q&A will end at 10:30 AM, Eastern Time. Operator, you can now take our first question.
Thank you. Our first question comes from Dan Fannon with Jefferies. Your line is now open.
Thanks. Good morning. Lee. I was hoping you could talk about the outlook for the rate franchise as we start this year with the prospects of higher rates and maybe frame the upside opportunity as you think about the business as it sits today and maybe distinguish a bit between the cash markets as well with the swaps markets in that backdrop.
Hey Dean (ph). Thank you for the question. And as typical on something like this, I can't really be too specific. I can make some broad comments about it. And it's a fundamental thing when you have -- and I've seen this for years as cycles on phot -- unfold when you have a combination of central bank activity with tapering and speculation about rate hikes that is typically a very good recipe for more volatility and more activity from our client base, right? Managing risk, expressing views, these are all real positives for our business. Not that we really had a strong rate. Hi cycle recently, but if you go back to the 2016 to 2020 period in our rates business, we had during that period, roughly 11.5% CAGR in terms of revenue growth. We heard about it in the U.K. today and CBS talking and that it's already begun. So we do believe that this is going to be a real positive for us across both our cash and derivatives business. The swaps business for us, has been a terrific business and we think will continue to be very, very impactful. You see that even in the Jan '21 levels.
Mortgages are a bit more challenging and we've seen that as well, But as the ray market changes, as rates rise, we expect it will spur volatility. And we think that will be very good for our business. When you move past all these macro things which we typically don't like to forecast about because we don't know. We're going to continue to focus on the things that we can control. And that's the innovation, the connection with our network. And all the things that we've been doing for the last couple of decades. So we want to continue to move the markets forward to digitize things and really respond to what our clients’ needs are. Thanks. Thanks for the question.
Thank you.
Our next question comes from Michael Cyprys with Morgan Stanley. Your line is open.
Hey, Billy, Sara morning. Just wanted to ask about use credit business. I was just hoping for a little bit more color on the market share gains that you guys are putting up. And I guess the question here is, these is being driven by clients switching from other platforms or is it being driven solely by conversion from Blaze? And then also to what extent do you see pricing playing any sort of competitive role here? Or is it really just about extension platform capabilities that the key drivers.
Hey Michael, it's Billy, thanks for the question. we -- I think we appreciate the way you are kind of framing that question in a positive way. And so talking about the market share gains that were clearly having. It's been -- there's really interesting in great journey that we've been [Indiscernible] credit, right? To think about the fact that we've gone from basically doing less than 1% market share four or five years ago to now kind of posting these really strong numbers, 12% to 13% market share in IG, our high yield numbers were off the charts in January. So it's an interesting and timely question. When we think about our credit business, and Lee said this, very consistently. The first thing you think about is the team. The team is off the charts good starting with our institutional business and our wholesale business, great communication, really quality team there. And then we always talked about, I think in an interesting way the market's desire to have competition in this space. It's not competition just to have competition. It's really this competition to spur innovation.
So when we think about innovation, as you know very well, we've always talked about portfolio trading and things that are happening around all-to-all trading. And then also obviously are kind of advantages that we spoke about around net spotting and net hedging. To your question about where the share is coming from, it's never like a perfect exact science answer. And it's a good question. We've all spoken about and we listened to other earnings calls and obviously there is in a professional and polite way, there's really good competitive back and forth that exists. But I do think that if we were to kind of ask the question specifically in credit, who our biggest competitor is? I think there's a chance that Lee and myself and Sara, we would kind of answer, like it's still the phone. It's still kind of the manual way of doing business and when you look at something, for example, like portfolio trading, which gets so much benefit from electronification and digitization. The fact that 50% of the volume in portfolio trading is still getting done kind of the old fashion way, gives us a lot of confidence that we can continue to kind of take market share from the phone, from manual ways of doing trades.
So what I would say to you is we're really doing well in credit. We're kind of taking market share from the phone. The phone is staying still with all these innovations and credit keep moving quickly and fastly and in significant ways that add advantages to clients. We are competitive, so we're going to continue to, obviously as we're moving phone business our way, we feel like on the edges and on the margins. We're also making big strides around traditional electronic volume. So it is a little bit of a combo package to be very honest with you. And then when we think about pricing, we've said this like really consistently, like we don't lead with pricing, we don't think we need to. Well, we feel really confident about where we have our offering priced, quite bluntly. But we feel like the marketplace expects more from us than just pricing. We feel like the marketplace expects innovation, service, and really delivering great results. So we kind of feel like that's our go-to there and we're going to continue down that path. And thank you for the question.
Great. Thanks so much.
Yes.
Thank you. next question comes from Alex Kramm with UBS. Your line is open.
Hey. Good morning everyone. I want to come back to the interest rate swaps comments you made earlier and sorry for being so focused on the near-term, but Lee, you made a comment that January is off to a good start in that business again, which quite frankly, we're seeing it a little bit differently. If I compared to where we ended the fourth quarter, I think it's down 20% or so January average daily volume. I know one month doesn't make a trend, but just trying to understand maybe what happened in the fourth quarter, and particularly in October, November, for making such a tough comp, or what was going on considering that volatility is up so far this year, other rate proxies in terms of volume -- of markets, all looking very good. This one seems to be a little bit of an outlier. So any color and maybe any offsets that you can talk about would be helpful. Thanks.
Sure. Hey, Alex. Thanks for question. First off, I'd say it's still early in the quarter. But having said that, both are swaps volumes and revenues in January are up double-digit year-on-year. So that's the reason we feel confident about what's going on there. Our January institutional swaps daily revenue run rate is also running higher than the fourth quarter, so that's another further evidence of the strength we're seeing and you got to also keep in mind there are seasonal factors that we have in our swaps markets. It's the third month of every quarter, that's the role period that tends to be our strongest month and that's set up for March, obviously. You also have a number of characteristics of the markets with dealers actively managing their balance sheets heading into year-end. But I wouldn't -- look -- I think that -- you're not supposed to read too much into a particular month. We're very pleased with January, we think it was a strong January. But to focus on a particular month or even quarter is not what we're doing.
We're really focused on the long term here. We're focused on investing in the business. Expanding our software offering to offer more functionality to pick up more of the processes that occur. As Billy was saying, the phone and if you look at the swaps market, this is the case that phone is still the largest market share, 70% of that market. So that's where we have to focus on. Adding clients, adding functionality, going after the market and the digitization wave, which does this kind of secular trend that we've been in for years. That we have a lot of confidence in the monthly, the quarterly is going to depends a lot on market conditions, which month you're in, what kind of activity in the best measure. In my opinion for how we're doing is look, how do we do last January and by the way last January was a strong January. So the fact that we had another strong January this year, it's very -- we think is very positive.
Makes sense. As I said, one month doesn't make a year. Just curious [Indiscernible] Thanks again.
Thank you.
Thank you. Our next question comes from Richard Repetto with Piper Sandler. Your line is open.
Yeah. Good morning, Lee and Farah congrats on a great 2021. You guys are really well-positioned. Looks like you're well-positioned going into 2022 as well. My question is going to be on portfolio trading. Billy, you highlighted it a bit, talked about the high hit rate and trying to get it has been higher hit rates even in liquid stuff as well. So I guess what's your outlook for portfolio trading market share going forward? [Indiscernible].
Hi, Rich. It's Billy. Thanks for the question. Look, like portfolio trading, all of the way that portfolio trading is getting digested in the market and being talked about now has changed so much really quickly from will this work too? While this works extremely well for sure we know this in what we would describe as low volatility markets. And now the question now has become a little bit as the market changes, will it still work the same way and we have -- I'll say this like very clearly, we have a lot of confidence that it will. We think the premises around portfolio trading, around certainty of execution, around all-in levels, around the way that real risk is being transferred around portfolio trading makes it a really sort of strong offering as the market changes. The other thing I would just mention to you, just very bluntly is that the amount of investments that are happening around portfolio trading specifically on the sell-side is really strong, right? The way they are integrating their APIs around portfolio trading kind of technical stuff, rich, has really started to change.
So I'm not sure I'm going to give you definitely. I'm going to say anything about light-bulbs or kind of shining the light. But I'm not going to necessarily give you like a specific number about where we think portfolio trading will go. It is mainstream now, and it's a significant portion in a significant way that the buy-side interacts with the market is going from being an asset manager type of functionality to something that's gotten widely embraced around the hedge fund community. And these are the signs that you need to understand and to know, that that getting sort of stronger and better around portfolio trading is absolutely the right strategy for us and for anyone going forward. And thanks for the question.
Got it. Thanks, Billy.
Yeah.
Thank you. Our next question comes from Alex Blostein with Goldman Sachs. Your line is now open.
Hey, good morning, everybody. Thanks for the question as well. I wanted to zone in a little bit more on the non-U.S. opportunity with respect to rate swap, specifically. It looks like you guys have about 18% market share when it comes to the swaps market broadly. Can you help us dissect the U.S. business versus non-U.S.? And if the non-U.S. is likely to catch up to the U.S piece, are there any meaningful implications for the capture rating, how the revenue and profitability from that business could evolve? Thanks.
Thank you. Thanks for question, this is Lee. Yes, that's a good question. So this is typical of what we've seen over the years. That the regions tend to be slightly out of sync on certain things and something like swaps, which was so driven by Dodd -Frank and the regulatory change in the U.S. which occurred before the changes in the U.K and Europe more broadly came in so there are kind of a little out of sync with Europe being a bit behind on the digitization front. So that whole market share of what's electronic just kicked in later. I think the opportunities though, when you take a big step back, are very, very similar. And you see acceleration in Europe interest rates, swaps, electronification occurring over the last couple of years as the myth, it's stuff kicked in. We've gone through the different categories of customers that were acquired to trade through regulation on entities like Tradeweb. This is a bit of a what I would say, catch up to an overall -- the cycles are the same in both when you take a big step back, right?
You've got a lot of room for electronification in both the U.S and Europe. Europe behind the U.S.. Pricing is always slightly different depending on obviously the products, the marketplace, the offering. I think we have a good setup for more ultimately revenue growth in Europe. The team has been very actively, particularly in Europe, adding clients. I was just over in London last week and spent a lot of time with our sales leadership and they've made great progress in expanding the network to get clients. That takes time to show up in the numbers. But we're really positive about that. Yeah, but broadly though, those two teams are very coordinated in each of the regions, there's a lot of overlap in the customer base as you would imagine, they're different units and different teams within those customers, depending on whether it's year for the U.S. But both currencies trade in both locations, we get a lot of dollar business out of Europe. So yeah. I do think though, when you look at those two markets, you will ultimately see something that's a little bit closer in terms of the electronification as time goes by.
But the fundamental thing in -- in the difference between Europe swaps and U.S. swaps, in my mind, is really thin. The out of sync regulatory changes to the last price, as we had in '08, '09, which took a number of years to show up in the markets. Interestingly, we actually started swaps when I was living in London. Quite a while ago so that was the first market we actually kicked off and by a few months, maybe six months. So it actually started first, but then the changes occurred on the regulatory side, there really accelerated things in the U.S. and Europe is now kind of a bit behind in terms of electronification, but catching up.
Super helpful. Thanks.
Thank you. As a reminder, ladies and gentlemen, that [Operator instructions]. Our next question comes from Brian Bedell with Deutsche Bank. Your line is now open.
Great, thanks. Good morning folks. Let’s come back to portfolio trading maybe a two-part are a little different. One on the I think has [Indiscernible] portfolio trading revenue in the fourth quarter versus the third quarter. It looks like it shifted a lot more [Indiscernible] o you guys. like 9% growth in U.S. [Indiscernible] quarter and then a 17% drop on international maybe just what's going on there in U.S. and non-U.S. in fully trading. And then just secondly, I appreciate all your comments, Billy, on the dynamics in what we're trading, I guess as you think about 2022 in terms of your share gains in credit. 2021 was obviously a good story on the portfolio trading side. I know a lot of other things contributed. But do you see other factors driving that share gains in credit -- in U.S. credit that is, in '22 more so than portfolio tradings in '21.
I'll answer that second part for first Brian for a second. I wouldn't say that we see sort of anything, obviously, like driving it more than portfolio trading. We see presenting value to our clients, as getting a bunch of these different protocols right. And we absolutely think that the all-to-all market and the RFQ functionality around how the all-to-all market is fundamentally important to the market. And so we are putting as much time and energy and investment into all of that as we are into portfolio trading, or quite frankly, anything else around credit. And then we look to prevent this all-in offering to our clients and then they wind up deciding in a certain interesting way. So we feel like if we can get that offering right to clients, then get that mix to clients right, we're going to be in great shape with them. I would come back to this very interesting concept around our confidence in portfolio trading working in a bunch of different market environments as being specifically important. So I would definitely highlight that to you. The very first part of what you said was a little static so maybe, just for a quick second, repeat that.
Are you sure yet?
Yeah.
The U.S. versus international and you're, I think Slide 9 reflect the U.S. grew linked-quarter and international drops in the quarter as we're wondering what was going on the internet for portfolio trading ADV.
The only thing I would say is real quick, it resonates equally in Europe and the U.S. I will fundamentally say that in a very strong way not to get myself in trouble with Rich, that light bulb goes off in both the U.S. and Europe in the same way the value portfolio trading is equally sort of appreciated in both regions. Europe tends to get very quiet in the fourth-quarter.
Yes. The other thing I would just add is that there's slightly from a timing perspective, we started with portfolio three years ago in the U.S. Europe is of later add, so it's not surprising to me, to see a little bit more inconsistency month-to-month, maybe even quarter-to-quarter, because it's a lot earlier in its trajectory and growth cycle. I think the news is actually incredible that we've something that was designed and I think this is one of the great strengths of our platform, something that was designed, thought of, created in the U.S. IG market is now -- we've spread it to the international markets to different asset classes. A lot of different applications to what we're doing with portfolio trading. Europe was a later adopter by a bit, I don't remember exactly the timing, but so it's not surprising a year, but a year. So a year later. This is -- they're a little earlier in their life cycle of growth.
That's great color. Thanks so much, guys.
Thank you. I have a follow-up with Richard Repetto from Sandler piper. Your line is open.
Hi guys, again. Actually, one more follow-up for Billy. Billy about two years ago or close to that. You're pretty blunt -- refreshingly blunt, when you said during the market volatility of the pandemic when it started that your all - to-all trade network wasn't quite as built out as [Indiscernible]. Now looking at the market share gains that you've made over the two years. I guess the question of what would happen now if you have the same volatility and you assuming you're institutional penetration is deeper. What would happen now if there was -- with high-volatility events in the marketplace.
Yeah, I appreciate that. I was blown then about that and I will be equally blunt now we will be much more competitive because of the resources and the investments that we've made around our AllTrade functionality. We feel extremely confident that if the markets get into any kind of zone that reflected March 2020, Rich, which anything is possible, we all know that, our share gains are going to hold and we feel confident about that. So that's me speaking bluntly again, back to you.
We prefer not to have another pandemic.
But like you said, Lee, we don't know. It's been a curve ball for a while. Anyway.
Yes. Thanks for the question.
That's helpful. Thank you.
Thank you. Our next question comes from Kyle Voigt with KBW. Your line is open.
EFT's proposal to bring treasury platforms under Reg ATS and in compliance with guess CI, just wondering if you could kind of just expand upon any potential impacts from that proposal, from an operational standpoint or costs or compliance standpoint as well?
Sure. Thanks, Kyle. Yes. No, we've been obviously following that and we're very engaged in that. Overall, I would just start off by saying, we've been a proponent of thoughtful regulation that focuses on more efficiency and transparency for decades and we'll continue to -- to take that approach. When it comes to kind of the proposals with respect to Reg ATS, I should say, we are array [Indiscernible] ATS and two instances we are a broker-dealer in another instance, so from a practical kind of operating standpoint for us, we have some stuff to do, but it's not like a significant thing. We're all set up for that, so from a cost basis, we don't see it as a big challenge. There are some things about it that we would like to see thought through a little bit more carefully. It's a pretty broad proposal and it's something that impacts a lot of folks. We want to make sure that that's all taken very carefully in terms of how it's ultimately implemented. But we just don't see it for Tradeweb and how we're regulated as that significant of a change.
Great. Thank you. And then if I can just ask a follow-up quickly on market data. You continue to take market share really across all your products. I'm just wondering how you view the ability to monetize, increasing datasets that you're continuing to gather on the platform. And any trends in terms of demand for that underlying data would be really helpful in framing out the growth for 2022. Thank you.
Sure. Thanks. Why don't I take that? This is Sara. I think we remain positive on our market data line. Overall we think that that has the opportunity for mid single-digit growth. Obviously two components of that, Refinitiv, as well as what you were alluding to, which is the proprietary data benchmarks that we have, including our APA products. We've seen a lot of positive trends in that line, certainly adding new clients in '21, and you saw that in that growth. Also there's some addition from NFI market data. But looking ahead, we expect to see that line continue to grow, new clients, new products with unit pricing coming in, with API for TCA, so I think the outlook is quite positive.
Thank you.
No problem.
Thank you. And I have a follow-up from Alex Kramm with UBS. Your line is open.
Yeah, hey. Hello, again. Also wanted to quickly on the portfolio trading side, seems like an active debate on there. I also think there's an active debate around how you define the market and how many trades are actually happening. So not sure if you addressed this already, sorry if I missed it, but can you talk about how many trades you generally do, how big these trades are on the portfolio trading side, and how this has maybe changed overtime? And then also, when you look at the marketplace, and you cannot talk to your client what's going on over the phone and maybe on other platforms, etc., how many portfolio-like trades actually happening every day in terms -- so we can get a better sense for the addressable market or extension?
The major portfolio trading never going to actually have like to trade ticket amount of Alltrade or other types of higher transaction business that we do. So I would say we do some of our reaching 20 to 25 portfolio trades a day. I think that the trend to be very conscious of is around what we would describe as block size trades that are now getting done through portfolio trades. So I think I can get this number exactly correct. We did $2 billion portfolio trades that significant. That's a real indication from our perspective that real risk trades are getting done and transacted through this style of protocol. So it's -- you can tell by the amount of questions we're getting on portfolio trading. It is mainstream, it is becoming a real risk transfer tool. Clients from asset managers to hedge funds are adopting it as a real protocol and our general feeling on this, it's a great question. Our general feeling on this is like being early and being the early adopter around this protocol and partnering with the marketplace the right way has given us a pretty significant advantage.
Okay, thanks again.
Yes.
Thank you, this concludes today's conference call. Thank you for your participation. You may now disconnect. Everyone, have a wonderful day.