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Eurex launches first exchange-traded European Equity Factor Index Futures

Release date: 03 May 2017 | Eurex Group

Eurex launches first exchange-traded European Equity Factor Index Futures

  • Eurex expands its equity index segment with futures on six iSTOXX Europe Factor Indices
  • Passive investing trend fuels demand for sophisticated index concepts

On 3 May 2017, Eurex, Europe’s largest derivatives exchange and part of Deutsche Börse Group, introduced futures on six iSTOXX Europe Factor Indices. The launch marks a major milestone, as for the first time European Factor Futures are listed with a tradeable order book on an exchange.

The increasing trend towards passive investing has revolutionized the style of investment approaches demanded by the market. This creates a growing need for sophisticated and diversified index concepts using different selection and weighting methods. This trend has led to the development of iSTOXX Europe Factors, systematic rules-based indices, designed to isolate the return of key risk factors and earn a risk premium over time.

“Leveraging the expertise and resources at STOXX allowed us to respond to the demand from market participants by developing and launching these innovative new products”, says Zubin Ramdarshan, Head of Product R&D Equity and Index at Eurex. “The European Equity Factor Index Futures will complement the existing Eurex suite of STOXX futures and options, which already covers pan-European and Eurozone indices. “

“Extensive portfolio-theory research has evidenced that equity returns can be explained by factors that are supplemental to the market risk. This is why a growing number of our clients are turning to factor investing as a way to generate returns passively. This is where we at STOXX provide a unique solution that enables them to capture risk premia at lower cost, based on a completely rules-based and transparent strategy. Now with futures on Eurex, our clients can implement their views while hedging their positions,” said Matteo Andreetto, chief executive officer, STOXX Limited.

Eurex’ new offer will comprise instruments for investors that allow them to capture factor risk premia associated with the STOXX 600 Europe benchmark. The STOXX Europe 600 futures market has established itself as the broader benchmark for Europe with liquid futures that traded over three million contracts in the first quarter of 2017 with an average daily volume (ADV) of approximately 46,000.

The introduction of futures on iSTOXX Europe Factor indices offer a tool for investors to capture different equity risk dimensions in each of the six futures: Size, Value, Carry, Low Risk, Momentum and Quality.

Media contacts:

Grit Beecken

Spokesperson for Clients, Products & Core Markets division (Eurex, Eurex Clearing, Clearstream)

Mergenthalerallee 61
65760 Eschborn

T +352 2 43-3 23 75

 

Christina Hudelmayer

Spokesperson for Clients, Products & Core Markets division

Mergenthalerallee 61
65760 Eschborn

T +49-(0) 69- 2 11-1 78 54

 
 
 

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