[This article originally appeared on our sister site, IndexUniverse.eu.]
MSCI has launched a new emerging market index which excludes the BRIC countries – Brazil, Russia, India and China.
The MSCI EM Beyond BRIC Index is made up of 17 countries, and excludes the BRIC nations which constitute over 40 percent of the MSCI Emerging Markets Index.
Deborah Yang, managing director and head of the MSCI index business, EMEA, said institutional clients often already had exposure to BRIC countries in their portfolios.
“We have launched the MSCI EM Beyond BRIC Index in response to client demand and believe it offers a new way to track and evaluate the emerging markets opportunity set for those wishing to invest in countries outside the BRIC region,” she said.
Larger emerging market countries like Taiwan, South Africa and Korea are capped on a quarterly basis at 15 percent to aid greater diversification. The other countries represented are Chile, Columbia, Czech Republic, Egypt, Hungary, Indonesia, Malaysia, Mexico, Morocco, Peru, Philippines, Poland, Thailand and Turkey.
The new index has outperformed the MSCI Emerging Markets Index since 1999, with an annualised return of 12 percent in US dollars versus 11.1 percent.
MSCI clients were informed of the launch on 5 September, and exchange traded funds (ETFs) have already been filed to launch on the back of the new index. One example is SPDR MSCI Beyond BRIC ETF (EMBB).
Last month MSCI also launched Quality Mix Indices, which aimed to represent the performance of quality, value and low volatility risk premia strategies worldwide in one index.