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Corporate Bond Index Futures – efficient access to European corporate bond market beta and generating alpha

Release date: 07 Nov 2017 | Eurex Exchange

Corporate Bond Index Futures – efficient access to European corporate bond market beta and generating alpha

Article by Byron Baldwin, Deputy Global Head , Fixed Income Derivatives Trading & Clearing Sales at Eurex

Eurex’s EURO STOXX 50® Corporate Bond Index Futures is the world’s first exchange-traded corporate bond index derivative. It gives the buy side and the sell side a very capital-efficient tool as well as leveraged access to European corporate bond market beta in terms of portfolio overlay and allows them to quickly add and subtract European corporate bond exposure to a multi-asset/GTAA portfolio.

For relative value hedge funds, the Eurex CBIF opens up new alpha generating opportunities in trading CBIFs versus Eurex Euro-Bobl Futures as a credit trade and against Eurex EURO STOXX 50® Index Futures as a correlation trade. For banks’ corporate and credit desks, it offers a valuable hedging and trading vehicle at a time when banks’ holdings of corporate bonds have declined due to the new regulatory capital requirements. Read more.