MSCI launches Emerging Market Index excluding BRICs
Friday, 13 September 2013 02:45
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MSCI Inc., a leading provider of investment decision support tools worldwide, has launched a new Emerging Markets index – the MSCI EM Beyond BRIC Index.
The index, a subset of the well known and widely used MSCI Emerging Markets Index, is comprised of 17 countries and excludes the BRIC countries – Brazil, Russia, India and China – which currently represent over 40% of the MSCI Emerging Markets Index.
“The BRIC countries have been recognized over the past few years as key drivers of economic growth within the Emerging Markets and many institutional investors already have exposure to those countries within their portfolios,” said Deborah Yang, Managing Director and Head of the MSCI Index Business in Europe, the Middle East, Africa and India.
“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.” To help diversify the representation across the 17 countries in the index, the weights of larger Emerging Market countries such as Taiwan and Korea are capped on a quarterly basis at 15%, giving greater prominence to smaller Emerging Market countries including Thailand, Malaysia and Indonesia.
The MSCI EM Beyond BRIC Index has outperformed the MSCI Emerging Markets Index since 1999 (12.0% gross annualized return in USD vs 11.1%). Between 1999 and 2007, the MSCI Emerging Markets Index outperformed the MSCI EM Beyond BRIC Index by 2.1 percentage points (20.1% vs 18%). Since 2007, the
MSCI EM Beyond BRIC Index has had a positive annualized performance of 2.83% while the MSCI Emerging Markets Index had a negative performance of 2.1%.
The countries in the new index are Chile, Colombia, Czech Republic, Egypt, Hungary, Indonesia, Korea, Malaysia, Mexico, Morocco, Peru, Philippines, Poland, South Africa, Taiwan, Thailand and Turkey.
