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New S&P Emerging Markets Index provides tradable exposure beyond the BRICS

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S&P Indices has launched the S&P Next Emerging 40, a tradable index comprised of 40 of the largest and most liquid equities issued by companies from emerging markets outside the BRICs (Brazil, Russia, India and China), Taiwan and South Korea. The Index is launched in response to increasing demand from investors seeking exposure to rapidly-expanding, smaller emerging markets.

Stocks eligible for inclusion in the S&P Next Emerging 40 come from countries including Chile, the Czech Republic, Egypt, Hungary, Indonesia, Malaysia, Mexico, Morocco, Peru, the Philippines, Poland, South Africa, Thailand and Turkey. The new Index reinforces S&P Indices’ established strength in emerging and frontier markets indices, and follows the recent launches of the S&P CIVETS 60, which provides exposure to 60 leading companies from Colombia, Indonesia, Vietnam, Egypt, Turkey and South Africa, and the S&P Access Africa, designed to measure the performance of companies with significant operational exposure to Africa through securities that are tradable and accessible to international investors.

Michael Orzano, Associate Director of Global Equity Indices at S&P Indices, says: "With the BRICs now established as a popular investment destination, investors are looking further afield to smaller, less-developed emerging markets which may have potential for growth. The S&P Next Emerging 40 is a tradable index which meets this demand, allowing the investment community to measure the performance of the largest and most liquid companies from countries ranging from Chile and the Czech Republic to Thailand and Turkey."

Benedict Redmond, Director in EFS Structuring at Barclays Capital, says: "Clients have picked up on emerging markets as a significant investment opportunity, although most EM exposure is heavily skewed to stocks from Brazil, Russia, India and China. The S&P Next Emerging 40 Index gives clients an opportunity to gain exposure to the other EM countries whilst retaining the benefits of both liquidity and the ability to access the Index in many formats."

The S&P Next Emerging 40 consists of 40 stocks including: America Movil SAB de CV ADR, MTN Group Ltd, KGHM Polska Miedz SA, Turkiye Garanti Bankasi, OTP Bank, CEZ Ceske Energeticke Zavody, Compania de Minas Buenaventura SAA, Genting Bhd and Enersis SA ADR.

Simultaneously, S&P Indices is offering risk control versions of this new emerging markets index.  This allows investors to limit volatility by replacing equities with a cash component if volatility exceeds a specified level.  The risk control versions will be for 10%, 15% and 18% volatility levels.

S&P Indices has licensed both the S&P Next Emerging 40 and the S&P Next Emerging 40 RiskControl Indices to Barclays Capital for the creation of structured investments.

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