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Hitendra D Varsani

Hitendra D Varsani

Managing Director, MSCI Research

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

    Reimagining Country Investing

    Research Report | Jan 29, 2024 | Rohit Gupta, Anil Rao, Manish Shakdwipee, Hitendra D Varsani

    We introduce an integrated framework to investing in individual country and regional markets, analyzing macroeconomic risks and new growth opportunities as well as the role of sustainable investments in a globally diversified portfolio. 

    ESG and Climate Reporting with Derivatives

    Research Report | Jan 5, 2024 | Hitendra D Varsani, Yuliya Plyakha Ferenc, Yu Ishihara, Dinank Chitkara, Rumi Mahmood

    No clear guidance presently exists on ESG and climate reporting for derivatives. Using input from market participants, regulatory guidance and a survey of existing research, we propose a framework for more transparent reporting to include derivatives. 

    Markets in Focus: Concentrating on Diversification

    10 mins read Blog | Jan 4, 2024 | Hitendra D Varsani, Andy Sparks, Dinank Chitkara

    Higher equity and bond correlation combined with increased index concentration suggest now is a good time to revisit allocations across regional, country, sector, style and thematic exposures for adequate portfolio diversification. 

    Using Derivatives to Scale China and Emerging Markets ex China

    6 mins read Blog | Nov 9, 2023 | Rohit Gupta, Hitendra D Varsani

    China’s large share of emerging-market (EM) equities and its falling correlations with EM are leading some investors to allocate separately to the two universes. A tactical overlay of futures and swaps could be used to adjust regional exposures. 

    Investment Trends in Focus Quarterly Roundtable

    Podcast | Oct 12, 2023 | Thomas Verbraken, Anil Rao, Hitendra D Varsani, Jim Costello

    Our quarterly roundtable examines markets, and market-moving events to help institutional investors as they determine the best way forward; across asset classes and parsing out differences between developed and emerging markets.

    Markets in Focus: Narrow Yield Spread and High Crowding Pressure Equities

    6 mins read Blog | Oct 3, 2023 | Waman Virgaonkar, Hitendra D Varsani, Juan Sampieri

    Eclipsing equity and bond yields and high crowding may be signs of a vulnerable equity market. We compare equity/bond yield spreads in the major regional markets along with crowding in sectors and regions.  

    Low Volatility Today. Concern or Opportunity for Tomorrow?

    3 mins read Quick Take | Sep 27, 2023 | Dinank Chitkara, Hitendra D Varsani

    The cost of hedging downside equity exposure has fallen substantially versus eight months ago, markedly lowering the price of insurance against rising equity volatility.

    The Market’s Bad-Breadth Problem

    Podcast | Jul 6, 2023 | Andy Sparks, Thomas Verbraken, Hitendra D Varsani

    Our panel of experts discusses the issues on investors minds and scenarios for what may come next. From inflation “stickiness” to market concentration to central bank actions, how have conditions varied across the globe?

    Markets in Focus: Looking Beyond the Rate Hikes

    7 mins read Blog | Jul 4, 2023 | Waman Virgaonkar, Hitendra D Varsani, Juan Sampieri

    Investors face “sticky” inflation, equity-market concentration and expectations that U.S. interest rates may be higher for longer. We examine recent global-markets trends to help as asset allocators and portfolio managers determine their next move. 

    Tech and AI-Driven Firms Spearheaded Thematic Resurgence

    2 mins read Quick Take | Jun 22, 2023 | Anil Rao, Hitendra D Varsani

    Themes such as robotics and AI, internet innovation, autonomous technologies and the digital economy — all featuring companies in the AI supply chain — have emerged as some of this year's top performers. Following a 2022 that was not kind to such firms, we examine this trend. 

    The Futures of Climate Action Is Now

    6 mins read Blog | Jun 7, 2023 | Dinank Chitkara, Hitendra D Varsani

    Derivatives linked to climate investing are in the early stages of product innovation and investor adoption. We compared the impact, financial risk and opportunity metrics for futures on the MSCI Climate Action Indexes.  

    Did the Trend Toward Short-Dated Options Extend Across Regions?

    2 mins read Quick Take | May 12, 2023 | Dinank Chitkara, Hitendra D Varsani

    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.

    Why More Short-Dated Options Did Not Increase Market Volatility

    4 mins read Blog | May 4, 2023 | Dinank Chitkara, Hitendra D Varsani

    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.

    Long Story Cut Short in Regional Equity Futures Positioning

    5 mins read Blog | Apr 12, 2023 | Rohit Gupta, Hitendra D Varsani

    The recent banking crisis startled the credit markets while the broad equity market remained resilient. We analyze net long-short positions as investors adjusted their index futures exposures to adapt to changing market dynamics.  

    Investors Stick the Landing in Q1 ‘23

    Podcast | Apr 6, 2023 | Hitendra D Varsani

    The first quarter of 2023 came with its own set of surprises for investors, whether looked at through the lens of market returns, factor returns and trying to figure out Central Banks... not to mention the fallout from some notable bank failures. We examine it all with Hitendra Varsani and Mark Carver.

    Markets in Focus: Factor Valuations and the New Rate Regime

    6 mins read Blog | Apr 3, 2023 | Waman Virgaonkar, Hitendra D Varsani

    Global equities and bonds remained volatile in the first quarter of 2023 following a strong start and a bumpy finish due to global banking concerns. We analyze whether factor valuations have adjusted to the new interest rate environment.  

    A Day in the Life of Regional Futures

    5 mins read Blog | Feb 15, 2023 | Hitendra D Varsani, Dinank Chitkara

    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 Asia

    2 mins read Quick Take | Feb 8, 2023 | Rohit Gupta, Hitendra D Varsani

    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 Decoupled

    2 mins read Quick Take | Jan 25, 2023 | Hitendra D Varsani, Rohit Gupta

    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 Day

    Podcast | Jan 12, 2023 | Hitendra D Varsani

    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 Shifts

    6 mins read Blog | Jan 3, 2023 | Waman Virgaonkar, Hitendra D Varsani

    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 | Abhishek Gupta, Hitendra D Varsani

    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 Story

    2 mins read Quick Take | Oct 4, 2022 | Dinank Chitkara, Hitendra D Varsani

    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 | Waman Virgaonkar, Hitendra D Varsani

    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 It

    Podcast | Jul 14, 2022 | Hitendra D Varsani

    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 World

    5 mins read Blog | Jul 6, 2022 | Hitendra D Varsani, Dinank Chitkara

    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 Defensive

    7 mins read Blog | Jun 30, 2022 | Waman Virgaonkar, Hitendra D Varsani

    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 Class

    6 mins read Blog | Jun 28, 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.

    Index Options Indicated Negative Market Sentiment

    2 mins read Quick Take | May 25, 2022 | Dinank Chitkara, Hitendra D Varsani

    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 Correction

    2 mins read Quick Take | May 23, 2022 | Raman Aylur Subramanian, Anil Rao, Hitendra D Varsani

    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 | Hitendra D Varsani

    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 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

    Research Report | Mar 7, 2022 | Hitendra D Varsani, Rohit Gupta

    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.

    Inflation is flying first class, will global growth find a ride?

    Podcast | Jan 13, 2022 | Andy Sparks, Hitendra D Varsani

    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 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.

    How ESG Affected Corporate Credit Risk and Performance

    Research Report | Nov 30, 2021 | Hitendra D Varsani, Guido Giese, Rohit Mendiratta

    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 | Hitendra D Varsani

    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 | 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.

    So, Factor Investors, Why So Defensive? Part 1

    Podcast | Sep 30, 2021 | Shuo Xu, Hitendra D Varsani

    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 Management

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

    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 | Hitendra D Varsani, Rohit Gupta

    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 | Hitendra D Varsani

    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 | 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. 

    In Spring, Does an Investor’s Fancy Lightly Turn to Value?

    Podcast | Apr 1, 2021 | Saurabh Katiyar, Hitendra D Varsani

    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 Value

    6 mins read Blog | Mar 31, 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 2, 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?

    Factor Trends: What is in? What is out?

    Podcast | Jul 9, 2020 | Hitendra D Varsani

    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 | 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 14, 2020 | Rohit Mendiratta, Hitendra D Varsani

    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 | Waman Virgaonkar, Rohit Mendiratta, Hitendra D Varsani

    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 | Rohit Mendiratta, Hitendra D Varsani

    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 Credit

    Research Report | Jan 6, 2020 | Hitendra D Varsani, Vipul Jain, Rohit Mendiratta

    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 | 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 | Waman Virgaonkar, Hitendra D Varsani

    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 | 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.