Following up on research showing why more short-dated options did not increase equity-market volatility in the U.S., we ask a similar question across regions to help global investors evaluate their portfolios.

Trading of U.S.-listed options more than doubled in 2022 compared to 2019 — as investors gradually gravitated from monthly to weekly to even daily options over those four years. Some have wondered if this could lead to greater equity-market volatilty.

After the collapse of Silicon Valley Bank and UBS’s takeover of Credit Suisse, what does the options market indicate for equity-market volatility in the months ahead?

Investors benchmarked to global and regional indexes may use index futures for hedging or asset-allocation decisions. We analyzed the intra-day volume patterns of futures linked to the MSCI World, MSCI EM and MSCI EAFE Indexes to illuminate pockets of liquidity.

India is the world’s fifth largest economy and one of the fastest-growing major markets. We believe that futures linked to the MSCI India Index could help capture a deeper opportunity set and manage Indian equity exposure. 

Geopolitical and macroeconomic risks have persisted, and investors remain concerned about ongoing turmoil. We assess market volatility while analyzing whether investors are hedging their portfolios going into the final quarter of 2022. 

With the MSCI World Index down 20.3% in the first half of 2022, equity hedge funds have not been immune to recent market volatility. We evaluate how equity hedge-fund exposure has changed in terms of sector and style factors.

While investors may aim to synthetically replicate equity indexes using a basket of local-index futures and currency forwards, our research focuses on potential country and currency risk as well as tracking error of these efforts. 

In the face of continued global equity-market volatility, we turn to the listed-options market to gauge investor perception of market risk over the coming months for EAFE, emerging markets and the U.S.

Faced with volatile markets, some have looked to options strategies to manage volatility or target alternative risk/return profiles. We evaluate historical performance of options-overlay strategies across various macro and volatilty regimes.

As commitments to reach net-zero by 2050 surge, institutional investors are looking for tools to implement net-zero strategies in portfolios. Futures linked to the MSCI Climate Paris Aligned Indexes are one option for asset managers and asset owners.