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Underlying of the month: MSCI indexes

Release date: 22 Jan 2014 | Eurex Exchange

Underlying of the month: MSCI indexes

MSCI indexes are the leading benchmarks in the asset management industry

The MSCI Global Equity Indexes are widely tracked global equity benchmarks and serve as the basis for over 500 exchange traded funds throughout the world. The indexes provide extensive equity market coverage for over 75 countries in the Developed, Emerging and Frontier Markets, applying a consistent index construction and maintenance methodology. This methodology allows for meaningful global views and cross regional comparisons across all market capitalization sizes, sectors and style segments and combinations.

The Eurex MSCI offer

The growing demand for broad MSCI indexes from our participants and in particular their strong interests in trading them in a liquid central order book make our suite of MSCI products so attractive. They help managers facilitate in- and outflows of funds, hedge existing equity exposure and enhance their portfolio performance.

Other advantages include Eurex’ possibility to combine order book trading with wholesale trading.  Besides the standard expiration dates, all MSCI derivatives are also available as Flexible Options.  Eurex’s Flexible Contracts facility allows institutional investors theOTC trading in options on more than 340 individual equities, equity indexes, ExchangeTraded Funds (ETFs), fixed income futures, gold, silver and money market options.Other advantages of MSCI index products on Eurex include the mitigation of counterparty risk via our CCP, as well as the cross margining of some MSCI products with existing benchmark index derivatives.

At the same time, MSCI futures offer a liquid order book.  Currently, seven Market Makers provide attractive spreads in MSCI Futures and 4 Market Makers in MSCI Options.

Eurex Exchange gives you all the benefits of a one-stop-shop with almost 2,000 products to be traded in various asset classes.  Our offer enables you to trade one of the world’s broadest ranges of derivatives based on MSCI indexes: MSCI World derivatives comprising of the developed markets, the MSCI Emerging Markets including the BRIC countries and the MSCI Frontier Markets.

With this offer Eurex Exchange is covering the entire world and in addition certain regions like Latin America, Europe, Middle East, Africa as well as Asia with futures and options.  We alsoprovide you with clearing solutions to enable wholesale transactions.

Key facts

  • Eurex is the only exchange offering both MSCI Index Futures and Options
  • Our benchmark MSCI contracts help minimize tracking errors and also minimize dividend risk since they are net total return
  • Order book trading supported by market makers, combined with EurexOTC trade entry services, brings you unrivalled opportunities in trading the benchmark Eurex MSCI derivatives
  • Flexible expiries up to 3 years for futures and five years for options allows you to structure the trade just the way you want it
  • The broad based  Eurex MSCI index futures contracts are CFTC approved and UCITS compliant
  • The Eurex MSCI index derivative suite is truly international with over 25 index futures from the Developed, Emerging and Frontier markets

About MSCI

MSCI is a leading provider of investment decision support tools to around 8,000 clients worldwide, ranging from large pension plans to boutique hedge funds. MSCI offers a range of products and services - including indexes, portfolio risk and performance analytics, and governance tools - from a number of internationally recognized brands such as Barra, RiskMetrics, IPD and ISS. Located in 23 countries around the world, and with over 3,000 employees, MSCI is dedicated to supporting the increasingly complex needs of the investment community with groundbreaking new products, high quality data, superior distribution and dedicated client support.

Start dates of top 5 MSCI contracts and their development

Contract

Eurex Product Code

Traded Contracts in Dec 2013

Daily Average  
in Dec 2013

Traded Contracts (2013)

Date of Listing

MSCI Europe Options

OMEU

117,378

6,521          

130,178

1 Jul
2013  

MSCI Emerging Markets Options

OMEM

10,184

566

21,681

1 Jul
2013

MSCI World Futures

FMWO

5,480

304

24,952

17 Mar 2013   

MSCI Russia Index Futures

FMRU

3,239

180

46,581

17 Mar 2013

MSCI Europe Futures

FMEU

7,887

438

115,939

17 Mar 2013