CME Group has announced plans to expand its equity product suite with the launch of E-mini Equity Factor futures on September 21, pending regulatory review.
The firm writes that equity factors are performance indicators that can help investors capture growth, navigate volatility and diversify holdings. The new E-mini futures will be available to complement single- and multi-factor strategies, delivering capital efficiencies for risk management and relative value trading.
The products will include:
E-mini S&P 500 Growth futures
E-mini S&P 500 Value futures
E-mini S&P 500 Quality futures
E-mini S&P 500 Momentum futures
E-mini S&P 500 Low Volatility futures
E-mini Dow Jones U.S. Dividend 100 futures
“Market participants are increasingly turning to equity factors to target specific components of risk and build more tailor-made portfolios,” says Joseph Hickey, Global Head of Equity Products at CME Group. “Our E-mini Equity Factor futures will provide additional flexibility for gaining and managing exposure to specific factors, with the centralized liquidity, margin offsets and seamless trading that clients rely on at CME Group.”
“Reflecting the strength of S&P Dow Jones Indices partnership with CME Group, this launch supports our shared focus on delivering transparent, relevant and efficient index-based tools to the marketplace. With new futures tied to S&P 500 factor, dividend, growth and value benchmarks, market participants gain more precise ways to express views, manage risk and access important segments of the U.S. equity market. The launch underscores our continued commitment to advancing the ecosystem of tradable index solutions,” says Robert Ross, Chief Commercial Officer at S&P Dow Jones Indices.
“Invesco’s factor ETF suite has changed the way investors approach portfolio construction and risk, and we are excited that CME Group will develop futures-based derivatives around several of our ETFs tracking S&P Dow Jones Indices factor strategies. When futures and underlying strategies develop together, the whole ecosystem gets deeper and more resilient — and that’s what ultimately helps to benefit investors,” says Pratik Doshi, Head of Equity ETF Strategies, Invesco.
“Since its inception in 2011, the Schwab U.S. Dividend Equity ETF (SCHD) has tracked
the Dow Jones U.S. Dividend 100 Index, giving investors access to consistent dividends and diversification within US equities. We welcome CME Group’s plans to offer futures-based
derivatives on the index, which we believe can help deepen liquidity and expand the investment ecosystem for SCHD shareholders and market participants,” says John Sturiale, Head of Product Management and Innovation, Schwab Asset Management.
E-mini Equity Factor futures will be eligible for margin offsets with other cleared equity products at CME Group. The contracts, listed on and subject to the rules of CME, will be available for trading on CME Globex, as well as through privately negotiated block trades, derived blocks and Basis Trade at Index Close (BTIC) transactions.
