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Eurex expands equity index segment with new factor futures

Release date: 31 Mar 2021 | Deutsche Börse

Eurex expands equity index segment with new factor futures

  • 12 futures covering cash equity factors in the U.S. and European equity markets
  • The products will meet increasing investor demand for factor-based investment tools

Eurex is expanding its strategically important equity index segment with new factor futures. The products will be launched on 26 April as a response to growing investor demand for factor-based instruments.

Factor investment has become one of the most popular index segments. This approach involves targeting specific drivers of return which differ from traditional beta.

The new offering is based on Qontigo’s STOXX® Industry Neutral Ax Factor Indices suite and comprises futures based on the five standard factors: Value, Momentum, Low Risk, Quality and Size. An additional Multi-Factor Future, which combines the five exposures in one product, is also included. The futures cover factors in both European and U.S. markets, represented by the STOXX Europe 600 and the STOXX USA 500 universes. All factors are built using the widely known Axioma factor risk model.

For these new state-of-the-art products, Eurex and Qontigo, both part of Deutsche Börse Group, joined forces to offer factor investors an easy, transparent, and cost-efficient alternative to trading the underlying equities or using OTC instruments.

Stephan Flaegel, Global Head of Indices and Benchmarks, Qontigo: “Our STOXX Industry Neutral Ax Factor Indices suite relies on commercially accepted and academically tested factor definitions and transparent index construction rules. It sets a new, high-quality industry standard in this growing market segment.”

Randolf Roth, Member of the Executive Board of Eurex: “The extension of the segment follows demand from institutional investors to use factor futures for tactical overlay strategies. With the new futures, Eurex will for the first time provide a consistent factor-based offering across regions, which investors can use to manage global factor portfolios.”

Product specifications for the new futures follow the well-known standards already in place for Eurex’s benchmark derivatives such as the the STOXX Europe 600 Index Futures.