‘Diversification is your free lunch' as market dynamics shift, CEO of world's largest index provider says

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“If you’re a longer term investor, the diversification is your free lunch, and that ability to get more defensive, or maybe interest…

Traders are diversifying their strategies with small caps and defensive sectors having their moment, Dan Draper, chief executive officer at S&P Dow Jones Indices, told CNBC's"Squawk Box Europe" on Wednesday.

" gives you a tilt toward smaller companies as well as value and more defensive, and building through that. We've also seen not only in the cash equity market, but derivatives — there's now a futures contract as well, E-Mini futures contract on the equal weight," Draper said. Numerous market participants have flagged the potential opportunity in small- to mid-cap stocks as wider market forces shift.

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