S&P Indices has launched an index comprised of equities issued by emerging market companies outside of the Brics (Brazil, Russia, India and China) markets, and Taiwan and South Korea.
The S&P Next Emerging 40 includes 40 of the largest and most liquid equities from promising, smaller emerging markets.
Michael Orzano, associate director of global equity indices at S&P Indices, said: “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.”
With volatility in such markets posing challenges to many investors, S&P is simultaneously launching risk control versions of the new index. These replace equities with a cash component if volatility exceeds a certain level, and will be available for volatility levels of 10%, 15% and 18%.
Both the index and its risk control versions have been licensed to Barclays Capital for the creation of structured investments.
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