Putting Futures to Work
Futures linked to MSCI indexes are increasingly being used as a tool to manage market exposure and maintain exposures to target investment benchmarks. In the chart below, we focus on futures tracking broad-market and single-country MSCI indexes listed on several global and local exchanges. In the top chart, we have illustrated aggregated "Volume notional" (in USD), month-end "Open-interest notional" (USD), month-end "Open interest" and average daily volume ("ADV"), along with their moving averages (Month: last 3 months and Quarter: last 4 quarters). At the bottom, the two tables illustrate the top five market exposures based on the previous month's "ADV notional" (USD) and previous month-end "Open-interest notional" (USD).
How to interact with this plot: Use the frequency drop-down menu at the bottom to select monthly or quarterly frequency. Use the market drop-down menu to select futures tracking broad-market or single-country indexes. For the top-chart, click the relevant radio button to select the required parameter and hover the mouse over the chart to see more details. Tables at the bottom are populated based on the selection of the market drop-down menu.
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Based on data from ICE Futures US, ICE Futures Europe, SGX, EUREX, HKEX, Cboe and Tadawul. Open Interest from EUREX shows a T-2 lag.
<span class="rel-cont-head">Using Derivatives to Manage Volatile Markets</span>
Exchange-traded derivative contracts linked to indexes such as the MSCI Emerging Markets, MSCI World and MSCI EAFE Indexes experienced substantial growth during extreme market volatility in March 2020.
<span class="rel-cont-head">Trends in Futures and Options Linked to MSCI Indexes</span>
Over the past two decades, as equity-derivative markets have grown, some investors have looked to exchange-traded futures and options as they seek to efficiently manage market risks and exposures in portfolios.
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