Market Vectors Index Solutions has licensed the Market Vectors GDP Africa Index and the Market Vectors GDP GCC Index to Van Eck Global, the seventh largest provider of exchange-traded products in the US and the 10th largest globally.
The indices replace the previous index benchmarks of Market Vectors Africa Index ETF (AFK) and Market Vectors Gulf States Index ETF (MES) which begin tracking the new benchmarks on 24 June 2013.
“We are pleased to announce the first licensing of GDP-weighted Market Vectors indices,” says Lars Hamich, chief executive at MVIS. “The GDP-based approach of the indices takes into account the specifics of emerging market countries. These countries often have fast growing economies but less developed financial markets and are mostly underweighted in market capitalisation-weighted indices. Moreover, the pure-play concept of Market Vectors indices, includes offshore companies, which are companies that are incorporated outside of e.g. Africa but generate at least 50 per cent of their revenues there. 21 per cent of all components in the MV GDP Africa Index are offshore companies. In this index, almost 70 per cent of the Materials sector and more than 90 per cent of the Energy sector are represented by offshore companies.”
GDP Indices provide an alternative view of markets. Other than traditional regional or global indices weighted by market-capitalisation, GDP indices assign country weightings based on a country’s gross domestic product.
MVIS currently offers a selection of five Market Vectors GDP-weighted indices: MV GDP Africa Index, MV GDP GCC Index, MV GDP Emerging Markets Index, MV GDP Emerging Europe ex Russia Index and MV GDP World ex US Index.