Eurex introduces fresh fixed income hedging tools
16 November 2017 Frankfurt
Image: Shutterstock
Eurex has expanded its options offering on fixed income exchange traded funds (ETF) with three new iShares offerings, which will be available from 20 November.
The three new options include the iShares US dollar high yield corporate bond ETF, an iShares J.P. Morgan USD emerging market bond ETF, and an iShares USD corporate bond ETF.
iShares is BlackRock’s primary ETF provider.
Eurex subsidiary said it expected the launch to be well supported as it responds to strong client demand.
In a statement on the launch Eurex explained that three large (unnamed) banks will provide liquidity for Eurex‘ options on fixed income ETFs.
The Deutsche Boerse Group noted significant end-user demand for European-listed fixed income ETF options, with institutional investors in Europe ready to migrate from US-listed options once the options are listed.
Brett Olson, head of fixed income iShares in Europe, the Middle East and Africa for BlackRock, said: “The growth of fixed income ETFs in Europe has broadened the range of investors and the way they use our ETFs.”
“These investors are telling us they need options on our fixed income ETFs, to provide a way to manage volatility in portfolios using a tool that is more representative of the cash bond market.”
Olson added: “With one eye on the growth in the US fixed income ETF options market, we believe these options will benefit clients that require a security that refers to a UCITS ETF.“
Lee Bartholomew, head of fixed income and foreign exchange product research and development at Eurex, added: “Fixed income ETFs offer an exchange traded source of liquidity for fixed income exposure to investors.”
“They allow for cost effective exposure to the corporate bond market. Furthermore, our new products provide investors with greater flexibility to hedge and manage their exposure to the fixed income, corporate and high yield bond markets.”
The three new options include the iShares US dollar high yield corporate bond ETF, an iShares J.P. Morgan USD emerging market bond ETF, and an iShares USD corporate bond ETF.
iShares is BlackRock’s primary ETF provider.
Eurex subsidiary said it expected the launch to be well supported as it responds to strong client demand.
In a statement on the launch Eurex explained that three large (unnamed) banks will provide liquidity for Eurex‘ options on fixed income ETFs.
The Deutsche Boerse Group noted significant end-user demand for European-listed fixed income ETF options, with institutional investors in Europe ready to migrate from US-listed options once the options are listed.
Brett Olson, head of fixed income iShares in Europe, the Middle East and Africa for BlackRock, said: “The growth of fixed income ETFs in Europe has broadened the range of investors and the way they use our ETFs.”
“These investors are telling us they need options on our fixed income ETFs, to provide a way to manage volatility in portfolios using a tool that is more representative of the cash bond market.”
Olson added: “With one eye on the growth in the US fixed income ETF options market, we believe these options will benefit clients that require a security that refers to a UCITS ETF.“
Lee Bartholomew, head of fixed income and foreign exchange product research and development at Eurex, added: “Fixed income ETFs offer an exchange traded source of liquidity for fixed income exposure to investors.”
“They allow for cost effective exposure to the corporate bond market. Furthermore, our new products provide investors with greater flexibility to hedge and manage their exposure to the fixed income, corporate and high yield bond markets.”
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