Eurex Launches First US ESG Future Excluding Thermal Coal
- New STOXX USA 500 ESG-X Index Futures tradable at Eurex
- First ESG contract covering the U.S. that excludes thermal coal
- Broadest ESG offering worldwide in listed ESG derivatives
Eurex, the leading European derivatives exchange, looks back on a successful first year in ESG trading. Investment companies are increasingly using ESG derivatives to hedge sustainably invested assets, as demonstrated by Metzler Asset Management’s recently launched value protection fund. The launch of the new STOXX USA 500 ESG-X Index Futures is the next step to support market participants in their sustainable investment strategies beyond Europe.
— STOXX Ltd. (@stoxx) February 10, 2020
The Eurex STOXX USA 500 ESG-X Futures contract, launched today, is the first exchange-listed derivative that covers the U.S. market while excluding thermal coal extraction and coal-fired power plants.
Michael Peters, Member of the Eurex Executive Board: “We want to offer our clients the greatest possible flexibility in ESG investments. Expanding our offering to the U.S. equity market is therefore the next logical step. Other regions and markets will follow in early March with the launch of further ESG contracts.”
Eurex provides the broadest offering in listed ESG derivatives. With the STOXX Europe 600 ESG-X Index Futures (FSEG), launched on 18 February 2019 and based on STOXX’s exclusion methodology, more than 700,000 contracts with a notional value of over EUR 10 billion have been traded.
STOXX’s method of filtering out undesirable negative components from a known benchmark offers a transparent and comprehensible approach, with a low tracking error to the respective parent index. Resulting ESG indexes are easy to implement as benchmarks for asset holders and are well suited as underlying for ETFs, derivatives or structured products.
The Metzler Wertsicherungsfonds 90 ESG (ISIN: DE000A2PPJG8), which was recently approved for distribution in Germany and Austria, demonstrates that investment companies are increasingly using Eurex ESG derivatives to implement sustainable investment strategies without negative effects on returns. It is the first mutual fund in Germany to combine value protection and ESG integration using futures on the STOXX Europe 600 ESG-X.
A number of Libor rates will cease to exist at the end of this year.
Pension funds in Asia have significantly increased their international exposure.
Temporary equivalence is set to expire on June 30 2022.
Clients want short-dated options to hedge or trade with more flexibility around market-moving events.
IRS trading volumes have fragmented without an equivalence agreement.