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Hitendra D Varsani

Hitendra D Varsani

Executive Director, MSCI Research

Hitendra D Varsani is an Executive Director and Factor Strategist. Previously, Hitendra was Head of the Quantitative and Derivative Strategies team for EMEA and Asia at Morgan Stanley, where he led the development of a suite of investable global factor-based index strategies across asset classes. Hitendra holds a degree in mathematics and computer science from Kings College London, and a Masters in mathematical finance from Imperial College London.

Research and Insights

Articles by Hitendra D Varsani

    Carbon Markets: An Emerging Derivatives Class

    6 mins read Blog | Jun 27, 2022 | Hitendra D Varsani , Rohit Gupta

    Carbon markets can play a significant role in managing carbon risk within equity portfolios to hedge against price risks. Our research focuses on applications, carbon-risk management and correlations to other assets classes.

    Introducing the Carbon Market Age

    6 mins read Blog | Jun 8, 2022 | Hitendra D Varsani , Rohit Gupta

    The carbon market can play a significant role in the decarbonization of the global economy by putting a price on carbon and giving polluters an incentive to reduce their emissions.

    Factors in Focus: Disentangling Market Gyrations Through the War

    7 mins read Blog | Apr 1, 2022 | Waman Virgaonkar , Hitendra D Varsani

    It was a tale of two quarters in many ways. We analyze the effects of past and present military conflicts on factor investing to provide insights to investors seeking to build resilient portfolios.

    Evaluating Options in Different Macro and Volatility Regimes

    5 mins read Blog | Mar 22, 2022 | Dinank Chitkara , Hitendra D Varsani

    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.

    Risk Control with Maximum Exposure

    Report | Mar 3, 2022 | Rohit Gupta , Hitendra D Varsani

    Classic risk-control uses cash and/or U.S. Treasurys with a growth asset, typically referenced to an equity index, which has stabilized volatility, but not always allowed strategies to reach their full potential. We present new approaches for doing so.

    Paris-Aligned Indexes to Manage the Future

    6 mins read Blog | Feb 17, 2022 | Dinank Chitkara , Hitendra D Varsani , Rohit Mendiratta

    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.

    Hotter Inflation Set Some Styles and Sectors on Fire

    7 mins read Blog | Jan 11, 2022 | Ashish Lodh , Hitendra D Varsani

    Whether due to stimulus, deglobalization, decarbonization or an overheating economy, higher inflation could have an impact on style-factor and sector performance. We investigate this impact in the context of two potential economic-growth regimes.

    Factors in Focus: Are Your Equity Styles Ahead of the Curve?

    7 mins read Blog | Jan 5, 2022 | Waman Virgaonkar , Hitendra D Varsani

    If economic expansion and higher inflation continue in 2022, interest rates could rise around the world. As investors re-evaluate equity portfolios, we look at factor-index performance in different U.S. interest-rate and yield-curve regimes.

    Factors in Focus: Where’s the Value in Defensive Positioning?

    5 mins read Blog | Oct 1, 2021 | Waman Virgaonkar , Hitendra D Varsani

    Throughout the third quarter, investors shifted attention to risks from inflation, tapering and potential interest-rate rises. We analyze global equities and the rotation toward defensive factors.

    ESG and Climate Derivatives in Equity Exposure Management

    Report | Jul 14, 2021 | Hitendra D Varsani , Rohit Mendiratta , Saurabh Katiyar

    Sustainable investing is on the rise around the world. We review four case studies involving global equities as a way to explore how investors could have used sustainable derivatives when managing ESG and climate-transition risk exposures.

    Active-Management Opportunities in a Disperse Market

    8 mins read Blog | Jul 13, 2021 | Rohit Gupta , Hitendra D Varsani

    Disperse markets have historically provided opportunities for active managers to outperform their respective benchmarks. We showed that, based on historical trends, CSV helped shed light on identifying where the dispersion was greatest.

    Factors in Focus: Go with the Flow?

    5 mins read Blog | Jul 1, 2021 | Waman Virgaonkar , Hitendra D Varsani

    In the latest edition of Factors in Focus, we look at flows into equity factor ETFs and whether it has been profitable, historically, to follow the money, along with our analysis of factor and factor-index performance over the second quarter.

    Factors in Focus: Value Springs into Action

    7 mins read Blog | Apr 6, 2021 | Hitendra D Varsani , Waman Virgaonkar

    Value has historically outperformed in economic recoveries. With the reopening of the global economy we examined value’s performance against other factors, and exposures from our adaptive multi-factor model at the end of Q1. 

    Reopening Economies and the Resurgence in Value

    6 mins read Blog | Mar 30, 2021 | Waman Virgaonkar , Hitendra D Varsani

    After 15 years of challenging performance, many have asked if value is still a valid investment strategy. But the reopening of the global economy following vaccination rollouts has reignited interest across stocks, sectors, countries and regions.

    How Are High-ESG-Rated Bond Portfolios Distinct?

    7 mins read Blog | Feb 5, 2021 | Hitendra D Varsani , Rohit Mendiratta , Guido Giese

    ESG investing makes up an increasingly large footprint in equity portfolios, but ESG integration in bond portfolios is still in its early days. We examine the characteristics that make high-ESG-rated corporate-bond portfolios distinct.

    Factors in Focus: Val-come Back! Shifting Factors as the Cycle Turns

    7 mins read Blog | Jan 6, 2021 | Hitendra D Varsani , Waman Virgaonkar

    In this two-year-anniversary edition of Factors in Focus, we reflect on the historical relationships between factor returns and macro cycles, which have provided useful information for investors looking to take an active stance on factor exposures based on their outlook.

    What ESG Ratings Tell Us About Corporate Bonds

    6 mins read Blog | Nov 11, 2020 | Rohit Mendiratta , Hitendra D Varsani , Guido Giese

    How did incorporating ESG factors affect the performance of corporate-bond portfolios? Did ESG add insights beyond credit ratings? How did ESG impact risk and performance of investment-grade and high-yield bonds? Short-dated versus long-dated bonds?

    Factors in Focus: Impact of Inflation on Style Factors

    8 mins read Blog | Oct 1, 2020 | Hitendra D Varsani , Waman Virgaonkar

    Global equities continued to rally in Q3, brushing aside fear of a second wave of COVID-19 and a large economic slump. We review what it meant from an equity and fixed-income factor perspective and look at what our models showed headed into Q4

    Corporate Bonds Through a Factor and ESG Lens

    Blog | Jul 20, 2020 | Rohit Mendiratta , Hitendra D Varsani

    COVID-19 has had a profound impact on how companies manage cash flows and liquidity. Bond investors face the possibility of increased leverage, rating downgrades and defaults. Can factors and ESG metrics shed light on these risks?

    Factors in Focus: How Trendy Is Your Style Factor?

    9 mins read Blog | Jul 6, 2020 | Hitendra D Varsani , Waman Virgaonkar , Rohit Mendiratta

    As markets rallied worldwide, investors took on high-beta exposure and rotated away from stocks with lower risk. The latest edition of Factors in Focus explores the details.

    Using Derivatives to Manage Volatile Markets

    Blog | May 4, 2020 | Hitendra D Varsani , Rohit Mendiratta

    We’ve previously noted growth in derivatives contracts to manage emerging-markets exposure in normal and stressed times. Now, facing a real-world stress test, how did investors use these tools? How have implied volatilities and option premium changed?

    Corporate-bond performance by factors and ESG

    Blog | Apr 9, 2020 | Hitendra D Varsani , Rohit Mendiratta

    The volatility seen in equity markets was also present among investment-grade corporate bonds,. We use factors and ESG ratings to dissect these bonds’ performance over Q1 2020.

    Factors in Focus: Risk sentiment and factor dynamics in a crisis

    Blog | Apr 2, 2020 | Hitendra D Varsani , Waman Virgaonkar , Rohit Mendiratta

    We analyzed the market effects from COVID-19 and a Saudi Arabia/Russia oil-price war. We also examined – for the first time – credit factor performance. How did the quarter play out? What did our adaptive multi-factor model show as it ended?

    Did corporate-credit factors offer a risk-return edge?

    Blog | Jan 23, 2020 | Hitendra D Varsani , Rohit Mendiratta

    Factors have gained popularity in equity investing for providing insight into the key drivers of portfolio risk and returns. Did tilting hypothetical fixed-income portfolios toward some bond-specific factors benefit investors?

    Factors in Focus: Will 2020 vision sharpen exposures?

    Blog | Jan 3, 2020 | Waman Virgaonkar , Hitendra D Varsani

    Some global equity markets reached all-time highs and experienced limited bouts of volatility over the course of 2019. But underneath the calm surface, we saw a high degree of dispersion among factors and sectors.

    Looking to the futures of emerging markets

    Blog | Dec 11, 2019 | Hitendra D Varsani

    Emerging-market (EM) equities have delivered unique risk and return characteristics over the last 30 years. Are futures on EM stocks a liquid enough means to gain exposure during normal and stressed conditions?

    Factors in Focus: Momentum hits a valuation speed bump

    Blog | Oct 3, 2019 | Waman Virgaonkar , Hitendra D Varsani

    The momentum-value spread saw one of the largest corrections in history over the summer. What does our model show going forward?

    Using multi-country multi-currency futures in portfolio management

    Blog | Sep 3, 2019 | Hitendra D Varsani

    Investors seeking to more tightly manage their exposures to regional or global benchmarks are turning to multi-country multi-currency futures.

    Factors in Focus: Dynamic short term, strategic long term

    Blog | Jul 2, 2019 | Waman Virgaonkar , Hitendra D Varsani

    We review factor performance over the second quarter, provide the perspective of a long-term view and look to indications from our adaptive multi-factor model heading into Q3.

    Factors in Focus: Risky start. Quality finish.

    Blog | Apr 2, 2019 | Hitendra D Varsani , Waman Virgaonkar

    We highlight the fast-moving rotation among factors that continued during Q1 2019. As we move into Q2 2019, this framework showed allocation changes in different factors.

    Time to Revisit Fundamentals of Quality?

    3 mins read Blog | Jul 13, 2017 | Hitendra D Varsani

    We have seen substantial rotation in factor index performance in the past 12 months. Value, the best-performing equity factor index in the second half of 2016, was the worst performer in the first six months of 2017.