S&P launches emerging markets index
In response to the growing practice of investing in emerging markets, Standard & Poor’s (S&P) has launched a new index encompassing shares traded on the markets of Brazil, Russia, India and China.
The S&P BRIC 40 Index has been developed to provide exposure to 40 of the leading companies in the specified countries that are already trading on the market exchanges of Hong Kong, London, and New York (including the Nasdaq).
S&P managing director and index committee chair David Blitzer said the index had been established to alleviate investors’ concerns over the liquidity of the securities issued in the selected emerging markets.
“The construction of the S&P BRIC 40 Index accounts for both the liquidity of the underlying stocks as well as the liquidity of the overall portfolio, resulting in an index which is more efficient to invest in,” he explained.
The S&P BRIC 40 Index seeks to reflect available floats, enhance index basket liquidity, and lessen single stock concentration by employing a method where modifications are made to market cap weights.
All companies included in the index have met minimum market capitalisation and liquidity requirements, as governed by their S&P/IFCI index series memberships.
The launch of the index follows a similar move by Dow Jones earlier in the month.
Recommended for you
Infrastructure assets are well-positioned to hedge against global uncertainty and can enhance the diversification of traditional portfolios with their evergreen characteristics, an investment chief believes.
Volatility in US markets means currency is becoming a critical decision factor in Australian investors’ ETF selection this year.
Clime Investment Management is overhauling the selection process for its APLs, with managing director Michael Baragwanath describing the threat of a product failure affecting clients as “pure nightmare fuel”.
Global X will expand its ETF range of exchange-traded funds next month with a low-cost Australian equity product as it chases ambitions of becoming a top issuer of ETFs in Australia.
