Credit futures expansion 'inevitable' - report

A study conducted by research firm Crisil Coalition Greenwich, which gathered responses from 41 credit investors in the US, UK and Europe in June 2025, concluded that around 85% of the investors were aware of credit futures.

The study participants cited tactical asset allocation and overlay management as main advantageous reasons for credit futures within investment portfolios.

“With industry awareness of these products high, market-wide open interest of US contracts approaching $2.5 billion (£1.8bn), and positive reviews from early adopters, the growth of credit futures in the months ahead seems inevitable,” said Kevin McPartland, head of Research at Crisil Coalition Greenwich Market Structure & Technology and author of 'The Future of Credit Futures.’

Educating trading desks on how credit futures work and, how they benefit traders and portfolios will be critical to speeding growth, added McPartland.

Futures offer an efficient way to quickly adjust overall exposure to the credit market, hedge existing positions or implement views on credit spreads, the Crisil study said.

While market participants have for decades shown interest in credit futures, this market has not yet taken off.

There were attempts to mimic the credit default swap market in 2007 by converting swaps traders to futures and bringing futures traders into the credit market but it was ultimately unsuccessful.

The Crisil study also traces the evolution of the credit futures market and analyses the potential benefits that futures bring to credit investors.

Eurex’s Credit Index Derivatives Partnership Program, launched in August, secured the backing of Goldman Sachs, Jane Street, JP Morgan and Morgan Stanley as the scheme’s inaugural members.

Cboe Global Markets in 2018 launched its iBoxx iShares US dollar denominated corporate bond futures, covering the investment grade and high yield markets. This was followed in June last year by an iBoxx $ Emerging Market Bond Index (IEMD) future.

CME Group listed its first US corporate bond index futures in June last year, marking its first foray into the market.

Intercontinental Exchange in December launched four MSCI MarketAxess index contract marking the US group’s entry into the asset class.