New ESG Fixed Income Indexes Futures Coming to Eurex

    Stockholm (NordSIP) – As financial markets continue to embrace ESG integration and sustainable investment practices, the sophistication of investment instruments available for asset managers needs to optimally manage the risk of ESG-driven portfolios. In this spirit, and following the launch of several index futures by Eurex at the start of 2020, the international derivatives exchange has announced it will launch futures on the Bloomberg Barclays MSCI Euro Green Bond SRI and Euro Corporate SRI indexes, on 27 September.

    According to Eurex, the ESG fixed income landscape currently comprises around US$53 trillion in outstanding bonds globally and has grown by over US$10 trillion in 2020 alone.  Beyond risk management, Eurex argues that the new futures will also offer the possibility of generating additional alpha via synthetic exposure to ESG fixed income indexes, and improve price transparency and regulatory compliance via the Central Limit Order Book and CCP clearing.

    “As well as providing a range of extra benefits to our clients – in terms of broadening the scope of their hedging and trading opportunities – these new futures show our continued leadership in several areas,” Lee Bartholomew, Head of Fixed Income ETD Product Design at Eurex says. “First, in terms of our listed FI derivatives offering, as well as in our efforts to assist clients with their ESG investment mandates. We are very proud to be pioneers in this vitally important segment and will look to build a portfolio of products to aid clients to access liquidity.”

    Futures on the Bloomberg Barclays MSCI Euro Corporate SRI Index will allow investors to track the Euro investment-grade corporate bond market, in a manner consistent with their ESG mandate. Futures on the Bloomberg Barclays MSCI Global Green Bond Index aim to provide a liquid and easily accessible solution for market participants willing to take exposure to the global green bond market.

    “By expanding our relationship with Eurex to introduce the first futures products associated with ESG in the fixed income space, we are proud to support the industry’s growing focus on socially responsible investing,” adds Umesh Gajria, Global Head of Index-linked Products at Bloomberg. “Our multi-asset class index suite provides myriad opportunities for product innovation, such as these new derivatives.”

    Image by Pat_Scrap from Pixabay

    Filipe Albuquerque
    Filipe is an economist with 8 years of experience in macroeconomic and financial analysis for the Economist Intelligence Unit, the UN World Institute for Development Economic Research, the Stockholm School of Economics and the School of Oriental and African Studies. Filipe holds a MSc in European Political Economy from the LSE and a MSc in Economics from the University of London, where he currently is a PhD candidate.

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