EM Lens: Credit Index Futures Can Improve EM Balance Sheets

Emerging market credit index futures improve liquidity and balance-sheet efficiency, yet they also open the door to a wider range of tactical and relative-value trading opportunities. Lee Bartholomew, global head of derivative markets at Deutsche Börse, joins Damian Sassower, Bloomberg Intelligence’s chief EM fixed income strategist, to assess the evolution of Eurex-listed EM credit index futures, with a focus on market structure and investor adoption. Bartholomew and Sassower discuss the potential for portfolio hedging, smart-beta overlays, basis trading and short positioning, as the universe of exchange-traded and unfunded EM credit exposure evolves.