USFEB to offer futures contracts on Morningstar stock indices
The US Futures Exchange has announced an agreement with independent investment research provider Morningstar to offer futures contracts on Morningstar's 15 style- and capitalisation-based indexes as well as its broad US market index.
The futures contracts will provide investment advisors, institutions and retail investors the opportunity to hedge against the performance of the sectors represented in Morningstar's indexes. USFE plans to list the contracts in the third quarter of this year.
'A futures contract on a stock index is a simple strategy to bring some balance to an investment portfolio,' says USFE chief executive Satish Nandapurkar. 'The combination of Morningstar's stock indexes and USFE's futures products will provide investors with a more flexible basis for portfolio construction and enhance the risk management tools in their arsenal.'
The Morningstar Style Index family consists of 16 equity indexes that track the US market by capitalisation and investment style. Morningstar uses a 10-factor style methodology to identify distinct growth and value characteristics and create an integrated framework for investment research, portfolio construction and market analysis.
'The Morningstar Style Indexes provide a cohesive, integrated framework that can be seamlessly used at all stages of the investment process,' says Morningstar Indexes director Sanjay Arya. 'Constructed without gaps or overlap, the style indexes can be used as precision tools for efficient portfolio construction.'
Morningstar offers a range of internet, software, and print-based products and services for individuals, financial advisors, and institutional clients, and provides data on more than 230,000 investment offerings, including stocks, mutual funds, and similar vehicles. The company has operations in 16 countries and minority ownership positions in companies based in three other countries.
The Chicago-based US Futures Exchange was formed in 2006 following Man Group's investment in the former Eurex US. It offers specialised products to meet the market demands of retail, hedge fund and institutional customers in a fully regulated, centrally=cleared futures and options exchange.
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