Buy and Sell Side Merge for Europe

Terry Flanagan

Russell, in partnership with Chi-X Europe, goes after Eurozone trading at every angle.

On October 3, Russell Indexes, in partnership with Chi-X Europe, a pan-European equities exchange, unveiled the Chi-X Europe Russell Index (CHERI) Series of pan-European indexes; a joint effort to offer broad-based tradable indexes across the region.

Both Russell and Chi-X have been in talks to release the CHERI series over the past year, according to Gareth Parker, senior director of index research and design.

“Both Chi-X Europe and Russell, within Europe, are young organizations,” Parker said, additionally citing that the Chi-X has the “largest exchange volumes in Europe.”

For Parker, the initiative comes from Russell’s objective to give European clients “products that cover Europe entirely”—with geographic span such as U.K. to Madrid, and also offers exposure to various asset classes.

Historically, investors used separate contracts for equities and currency exposure; the CHERI series aims to give investors “one contract to do all the underlying trading.” Parker cited clients claiming that the Euro Stoxx, often deemed the gold standard of European indexes, were too small only at 50 stocks and “no longer fit clients’ purposes.”

The indexes’ target audience are those already trading Europe—which means that for volatility players, “it doesn’t matter if Europe goes up, or down,” Parker noted.

“People need to trade Europe via something that’s efficient, cheap and easy, to help manage cash flow,” he said of the new index series.
At launch, the four indexes in the CHERI series are: Chi-X Europe Russell PanEurope Index, a broad, highly liquid index of large capitalization stocks from developed European markets. The index includes 216 securities across 14 countries and five currencies.

Similarly, the Chi-X Europe Russell Eurozone Index represents a liquid, large-cap index providing broad exposure to Eurozone markets. The index includes 130 securities across 10 countries and one currency.

The Chi-X Europe Russell PanEurope 60 Index, including the 60 biggest stocks only. The index includes 60 securities across eight countries and three currencies. The Chi-X Russell Europe Eurozone 40 Index will consist of 40 largest stocks are included. The index includes 40 securities across eight countries and one currency.

The new CHERI indexes are subsets of the Russell Global 1000.

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