Deutsche Börse has just announced Eurex’ September report.
The investment behaviour of the buy side is undergoing structural changes. Passive products like Exchange Traded Funds (ETF) are gaining momentum. This changes the investment behaviour on the derivatives markets and increasingly shapes the product offering of exchanges.
Eurex CEO Thomas Book commented when presenting Deutsche Börse Group’s latest derivative trading statistics:
The growing success of indexation via ETF has brought index providers further to the forefront of asset allocation – not only on the investment side, but also in trading.”
Especially broad based indices like MSCI and Stoxx600 are profiting from that trend. In September, Eurex’ MSCI segment reached 1 million contracts of open interest for the first time.
Historically, MSCI has been the index provider of choice for the buy side seeking broad and reliable benchmarks to compare with their own performance and looking for tools to analyse risk and returns. Globally, roughly 40 percent of all ETF assets in equity products are based on MSCI indeces. With more providers of MSCI related vehicles and a growing competition on pricing these, an increased need for cost-effective and efficient hedging tools in the form of futures and options arises.
As a result, Eurex steadily extends its product range. The exchange lists the majority of bench-marks used by fund managers worldwide. Since the beginning of 2016, the turnover in Eurex’ MSCI segment amounted to more than 3.7 million contracts; compared to 1.6 million contracts in the whole of 2015.
“These figures indicate a strong trend”, commented Book. “We support the buy side by offering a total of 72 futures and 15 options in the MSCI universe.”
Eurex is the only exchange that has an extensive offer of both futures and options on MSCI benchmark indices, and is constantly working on building liquid order books and increasing transparency in the market in order to support both market participants and the regulators in their strive for safe and stable markets.