Hitendra D Varsani is a Managing Director and Global Head of Factor and Derivative Solutions Research at MSCI with 20 years of industry experience based in London. At MSCI, Hitendra has been responsible for innovative research and product development of factor, ESG and Climate indexes in equities and fixed income. 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, spanning equities, fixed income, currencies and commodities as well as futures and options. 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
A Day in the Life of Regional Futures5 mins read Blog | Feb 15, 2023 |
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.
The Futures of Emerging Markets in Asia2 mins read Quick Take | Feb 8, 2023 |
There are varying risks and opportunities for emerging markets (EM) equities in Asia. We highlight EM Asia futures as a potential path for asset allocation, tactical adjustments and risk-management purposes.
The Futures of Emerging Markets Decoupled2 mins read Quick Take | Jan 25, 2023 |
Investors in emerging markets begin the year with historically low valuations and softened U.S. dollar strength. With a wide decoupling within these markets, we assess the consideration of multi-country, multi-currency or single-country futures.
Investors Hope Something Changed on New Year’s DayPodcast | Jan 12, 2023 |
Investors look to clear the slate after a volatile year in the markets, with both global equities and bonds declining against a surge in inflation, waning economic growth, geopolitical tensions and monetary tightening. We take a look at market conditions, valuations and investor allocations as we assess what might be impactful in 2023.
Markets in Focus: Investors Look to Capture Big Market Shifts6 mins read Blog | Jan 3, 2023 |
Global equities and bonds declined in 2022 against a surge in inflation, waning economic growth and monetary tightening. We highlight how factor indexes, country allocation and thematic investing can help investors capture opportunities with greater precision.
Market Risk and Volatility: Trick or Treat?Podcast | Oct 6, 2022 |
Markets experienced a brief ray of risk-on light during the third quarter, but investors quickly retreated back into the risk-off shadows as the Fed reasserted its tough stance on taming inflation. We take the temperature of the market and explore where we might be headed.
Derivatives Tell a Protective Story2 mins read Quick Take | Oct 4, 2022 |
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.
Markets in Focus: Is the Beta Pendulum an Edge or Hedge?7 mins read Blog | Sep 30, 2022 |
Investors remained fearful of inflation and recession worries in the third quarter of 2022. We take a closer look at beta in a period where factors were sensitive to changing market conditions.
Bulls May Have to Just Grin and Bear ItPodcast | Jul 14, 2022 |
Our guests analyze the drivers of the worst six-month start to the year on record for global equities, in nearly half a century, and look at how investors are approaching allocations headed into the second half of 2022.
Index Replication with Futures in a Deglobalized World5 mins read Blog | Jul 6, 2022 |
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.
Markets in Focus: Half-Time – Keeping it Real and Defensive7 mins read Blog | Jun 30, 2022 |
It was a challenging market environment in the second quarter. We take a closer look at real assets, defensive sectors and factor indexes as investors navigate what might be a prolonged period of volatility and uncertainty.
Carbon Markets: An Emerging Derivatives Class6 mins read Blog | Jun 28, 2022 |
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 Age6 mins read Blog | Jun 8, 2022 |
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.
Index Options Indicated Negative Market Sentiment2 mins read Quick Take | May 25, 2022 |
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.
Seven Lean Years and Other Lessons from the Last Tech-Stock Correction2 mins read Quick Take | May 23, 2022 |
While the share of U.S. technology firms with a substantial drawdown has risen fast, it is not yet at the level of the early-2000s technology crash. It is, nonetheless, worth examining what lessons we might pull from the wreckage of that time.
Not Your Father’s Stagflation (or Is It?)Podcast | Apr 7, 2022 |
The first quarter of 2022 started with concerns about inflation and the potential for low growth — conditions many of today’s investors haven’t seen outside of textbooks. By the end of February, the war in Ukraine had introduced even more volatility. Our latest quarterly check-in digs deep into these issues and more.
Factors in Focus: Disentangling Market Gyrations Through the War7 mins read Blog | Apr 1, 2022 |
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 Regimes5 mins read Blog | Mar 22, 2022 |
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 ExposureResearch Report | Mar 7, 2022 |
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 Future6 mins read Blog | Feb 17, 2022 |
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.
Inflation is flying first class, will global growth find a ride?Podcast | Jan 13, 2022 |
As investors ponder the next move for economic growth, the effects of inflation and the Fed’s signaling they’re about to take away the punchbowl, we look at how different yield curves have shaped factor performance and the effects of various inflation/growth scenarios.
Hotter Inflation Set Some Styles and Sectors on Fire7 mins read Blog | Jan 11, 2022 |
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 |
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.
How ESG Affected Corporate Credit Risk and PerformanceResearch Report | Nov 30, 2021 |
Environmental, social, and governance (ESG) investing is a very broad field with many different investment approaches addressing various investment objectives across asset classes. While there are many studies relating to ESG in equities, the risk assessment of ESG considerations within fixed income may be equally if not more important.
So, Factor Investors, Why So Defensive? Part 2: Oh, That’s Why.Podcast | Oct 4, 2021 |
In the wake of the volatility seen over the last few days of the third quarter of 2021, we check back in with Hitendra Varsani about what happened, what may have been behind it and what MSCI’s multi-factor model showed as of Sept. 30, 2021.
Factors in Focus: Where’s the Value in Defensive Positioning?5 mins read Blog | Oct 1, 2021 |
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.
So, Factor Investors, Why So Defensive? Part 1Podcast | Sep 30, 2021 |
Concerns over corporate leverage in China, and nervousness about inflation and the direction of interest rates were just a few of the reasons behind the shift toward defensive factors in the third quarter. We analyze the third quarter from three continents, with MSCI’s Hitendra Varsani, Mark Carver and Shuo Xu.
ESG and Climate Derivatives in Equity Exposure ManagementResearch Report | Jul 14, 2021 |
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 Market8 mins read Blog | Jul 13, 2021 |
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.
Did Pfizer Give the Value Factor a Much-Needed Shot in the Arm?Podcast | Jul 8, 2021 |
As the second quarter of 2021 drew to a close and the global economy continued to reawaken, the big stories were the resurgence of value, the positive correlation between value and momentum and the potential for inflation. What can history and factor ETF flows tell us about our current conditions? Executive Director of Global Solutions Research, Hitendra Varsani, is back, along with BlackRock’s Robert Hum and Patrick M. Moraniec, Senior Investment Manager of International Equity for the State of Michigan Retirement System.
Factors in Focus: Go with the Flow?5 mins read Blog | Jul 1, 2021 |
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 Action7 mins read Blog | Apr 6, 2021 |
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.
In Spring, Does an Investor’s Fancy Lightly Turn to Value?Podcast | Apr 1, 2021 |
Despite a decade or so of disappointing performance, value’s recent uptick merits examination into what drove its performance historically, and if conditions have changed or if the factor needs to be redefined. We look at near- and long-term performance with Hitendra Varsani, Executive Director, Global Solutions Research, and Saurabh Katiyar, Executive Director, MSCI Research.
Reopening Economies and the Resurgence in Value6 mins read Blog | Mar 31, 2021 |
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 |
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 Turns7 mins read Blog | Jan 6, 2021 |
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 Bonds6 mins read Blog | Nov 11, 2020 |
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 Factors8 mins read Blog | Oct 2, 2020 |
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 LensBlog | Jul 20, 2020 |
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?
Factor Trends: What is in? What is out?Podcast | Jul 9, 2020 |
We spoke with Hitendra Varsani about the latest factor trends across equity and fixed income markets. Where did we see outperformance during the second quarter? What did MSCI’s Adaptive Multi-Factor Allocation Model show as we moved into Q3?
Factors in Focus: How Trendy Is Your Style Factor?9 mins read Blog | Jul 6, 2020 |
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 MarketsBlog | May 4, 2020 |
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 ESGBlog | Apr 14, 2020 |
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 crisisBlog | Apr 2, 2020 |
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 24, 2020 |
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 and Corporate Bonds: Single and Multi-Factor Approaches to Corporate CreditResearch Report | Jan 6, 2020 |
Could factor investing offer a risk-return edge in USD investment-grade corporate credit? We simulated the past performance of six fixed-income factors — value, low size, quality, momentum, carry and low risk — that broadly align with MSCI’s equity factors.
Factors in Focus: Will 2020 vision sharpen exposures?Blog | Jan 6, 2020 |
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 marketsBlog | Dec 11, 2019 |
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 bumpBlog | Oct 3, 2019 |
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 managementBlog | Sep 3, 2019 |
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 termBlog | Jul 2, 2019 |
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 |
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 19, 2017 |
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.