FTSE Russell is launching a brand new index series to track emerging market local currency bonds called the FTSE Frontier Emerging Markets Government Bond (FRNTEMGBI) Index Series
Bond inflows could see a happy break as Egypt was recently added to a brand new index series for emerging markets by Investment management company FTSE Russell.
A subsidiary of London Stock Exchange Group, FTSE Russell is launching a brand new index series to track emerging market local currency bonds called the FTSE Frontier Emerging Markets Government Bond (FRNTEMGBI) Index Series.
“The objective of this index series is to provide transparency for a universe of emerging local currency government bond markets that may not yet be considered mainstream emerging markets,” wrote the company in a statement.
The FTSE Frontier Emerging Markets Government Bond Index Series, which includes a market value weighted index and a 10 percent country capped index, measures the performance of 13 fixed-rate local currency government bond markets, the index provider said on Tuesday.
The launch showcases the growing interest in emerging markets as investors look for more stable markets that have reduced exposure to flighty global capital flows.
Egypt, Bangladesh, Costa Rica, Dominican Republic, Ghana, Kenya, Morocco, Nigeria, Pakistan, Serbia, Sri Lanka, Ukraine and Vietnam were included at the index launch; with a combined bond total market value of around $414.8 billion.
“The cornerstone of the design of this index series is a novel, new approach for frontier emerging markets bond classifications that incorporates FTSE Fixed Income Market Accessibility Levels, as well as other observable and objective criteria including market size, sovereign credit rating and World Bank Income Levels,” wrote FTSE Russell.
Out of the 588 bonds on the index, 80 local Egyptian bonds are featured, with an average yield of 14.86 percent calculated at the end of March 2021.
This new series leverages the transparent and evidence-driven FTSE Fixed Income Country Classification Process to track the performance of fixed-rate local currency government bonds issued by countries classified as Frontier Emerging Markets, wrote the company.
Market inclusion in the new series will be reviewed semi-annually in March and September.