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
Clime Investment Management has welcomed an independent director to its board, which follows a series of recent appointments at the company.
Ethical investment manager Australian Ethical has cited the ongoing challenging market environment for its modest decrease in assets over the latest quarter.
Commentators have said Australian fund managers are less knowledgeable compared with overseas peers when it comes to expanding their range with ETFs and underestimating the competition from passive strategies.
VanEck is to list two ETFs on the ASX next week, one investing in residential mortgage-backed securities and the other in Indian companies.
