Bringing you live news and features since 2006 

S&P launches first investible index for frontier equity markets


Global index provider Standard & Poor’s has announced the launch of the S&P Select Frontier Index, the first investible index covering a broad range of frontier equity markets acro

Global index provider Standard & Poor’s has announced the launch of the S&P Select Frontier Index, the first investible index covering a broad range of frontier equity markets across emerging Europe, Asia, South America and the Middle East.

The S&P Select Frontier Index is comprised of 30 of the largest and most liquid companies from countries with smaller economies or less developed capital markets than traditional emerging markets, and which as a result have previously been excluded from most emerging market benchmarks and investment funds.

Alka Banerjee, vice-president of Standard & Poor’s Index Services, says the S&P Select Frontier Index is designed to meet the needs of increasingly sophisticated investors seeking to create index-linked products for frontier markets that have the potential for similar or greater returns than other better known developed and emerging markets. The S&P Select Frontier Index is a subset of the benchmark S&P Extended Frontier 150 Index.

‘Liquidity has increased tremendously in frontier markets since 2001 as restrictions on foreign investment have been relaxed and returns have outpaced both developed and emerging markets over the last decade,’ Banerjee says.

‘Less correlated to global economic cycles than their more developed counterparts, the combination of accelerating economic growth, increased government focus on privatisations and heightened IPO activity provides an attractive investment environment for those seeking alpha and diversification benefits.’

The universe from which index candidates are drawn comprises publicly-listed companies from 11 markets in the Standard & Poor’s Emerging Market Data Base that are generally accessible to foreign investors but excluded from the S&P/IFCI Emerging Markets Index.

At launch, the S&P Select Frontier Index includes companies from Bulgaria, Cambodia, Colombia, Jordan, Kazakhstan, Pakistan, Panama, the United Arab Emirates and Vietnam. The biggest country weightings are Pakistan (28.97 per cent), UAE (23.12 per cent), Jordan (13.23 per cent), Vietnam (11.54 per cent) and Panama (7.74 per cent), while the top constituents are MCB Bank (Pakistan), Emaar Properties (UAE) and Copa Holdings (Panama).

To be eligible for inclusion in the index, a company must have a minimum float-adjusted market capitalisation of USD100m, a minimum average daily value traded of USD2m and a minimum of 15 days traded over the previous six months. Constituent weights are driven by liquidity and size.

Standard & Poor’s Index Services offers a wide variety of investible and benchmark indices including the S&P 500, an index with USD1.3trn invested and USD4.8trn benchmarked, and the S&P Global 1200, a composite index comprising seven regional and country headline indices.

Latest News

Morningstar has published a review of the European ETF market for the first quarter 2024, which finds that it gathered..
ETF data consultant ETFGI reports that assets invested in the global ETF industry reached a new record of USD12.71 trillion..
Calastone has published an ETF white paper which examines several of the processes that take place across the lifecycle of..
Adapting product lines to fit into changing methodologies and meet shifting demand is essential to remaining relevant in the industry..

Related Articles

Kristen Mierzwa, FTSE Russell
Index Investments Group (IIG), a division within index provider FTSE Russell, has extended its range of indices through two new...
US ETF issuers of active ETFs are facing an increase in fees from the big custodian firms, such as Charles...
Taylor Krystkowiak, Themes ETFs
Themes ETFs opened its doors in December 2023, with an introductory suite of 11 ETFs – seven thematic and four...
Konrad Sippel, Solactive
At the end of March, financial index specialist, Solactive, published its 2024 annual report on future trends.  ...
Subscribe to the ETF Express newsletter

Subscribe for access to our weekly newsletter, newsletter archive, updates on the site and exclusive email content.

Marketing by