Lee McGinty, head of credit derivatives index research at JP Morgan Chase in London, said the majority of these products have been driven by banks' internal research and analytic needs. But the Citigroup product appears to be a direct competitor to JP Morgan Chase/Morgan Stanley's trac-x index that was released in Europe last month, but is yet to debut in the US. However, McGinty is unconcerned: "The chance of anyone joining in and trading Citi's index is very low, as there are other products with far more liquidity and transparency," he said.
JP Morgan Chase and Morgan Stanley are launching a funded version of their European trac-x index next week, as well as other modified products. McGinty declined to provide additional details, but JP Morgan Chase has previously said it would bring out a tranched version of the trac-x index in July. JP Morgan Chase and Morgan Stanley are planning to launch a US version of trac-x on July 25.