CME to Launch E-mini Equity Factor Futures on Sept. 21

CME Group will list E-mini Equity Factor futures on Sept. 21, pending regulatory approval. The contracts will be listed on and subject to the rules of CME and will trade on CME Globex.

The E-mini suite will include futures linked to the S&P 500 Growth, S&P 500 Value, S&P 500 Quality, S&P 500 Momentum, S&P 500 Low Volatility and the Dow Jones U.S. Dividend 100 indices.

CME said the contracts are intended to let traders and portfolio managers gain targeted exposure to equity factors and to complement single- and multi-factor strategies. The exchange stated the products aim to deliver capital efficiencies for risk management and relative-value trading and will be eligible for margin offsets with other cleared equity products.

Market participants can trade the contracts on CME Globex or execute privately negotiated block trades, derived blocks and Basis Trade at Index Close (BTIC) transactions. CME said the contracts will clear centrally under CME rules.

Joseph Hickey, Global Head of Equity Products at CME Group, said, “Market participants are increasingly turning to equity factors to target specific components of risk and build more precise portfolios.” He added the futures will provide flexibility to manage factor exposure while offering centralized liquidity and margin offsets.

Robert Ross, Chief Commercial Officer at S&P Dow Jones Indices, described the launch as adding futures tied to S&P 500 factor, dividend, growth and value benchmarks and said the products give market participants more precise ways to express views and manage risk.

Pratik Doshi, head of equity ETF strategies at Invesco, noted that Invesco’s factor ETFs have influenced how investors construct portfolios and that developing futures alongside ETFs can deepen and strengthen the market ecosystem.

John Sturiale, head of product management and innovation at Schwab Asset Management, noted that the Schwab U.S. Dividend Equity ETF (SCHD) has tracked the Dow Jones U.S. Dividend 100 Index since 2011 and that futures on the index could deepen liquidity for SCHD shareholders and other market participants.

The launch follows growing use of factor-based investing, where managers and investors use measurable attributes such as value, momentum, quality, low volatility and dividend yield to seek returns, manage volatility or diversify exposures. CME and its index partners said the futures will provide an additional instrument set for hedging, executing relative-value trades and expressing factor views.