Wednesday, October 17, 2007

CME Introduces Emerging Markets Index Futures

Stock returns in the emerging markets have soared over the last 4 years (33% per year for the MSCI Emerging Markets Index) compared to the U.S. (10% annual return for the S&P500), see the chart above (both indexes are set to 1000 in October 2003).

In response to the increasing interest in investing in emerging markets and rising demand to hedge investments in those markets, the Chicago Mercantile Exchange (CME) is launching a new futures contract on emerging-market stocks.

Starting next Monday, the CME will offer futures contracts on the MSCI Emerging Markets Index, a free float-adjusted market capitalization index containing more than 800 stocks from 25 emerging markets.

Read more here.

Just another indicator of how: a) globalization is affecting investment patterns, and b) how markets respond quickly to demand for new products.


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