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FTSE Group (“FTSE”), the award winning global index provider, announced the results of the FTSE Emerging Index annual review today. The index includes large and mid cap securities from advanced and secondary emerging markets, classified in accordance with FTSE’s transparent Country Classification Review Process.
New constituents to join the index include eight Indian companies: Glaxosmithkline Consumer Healthcare, Godrej Consumer Products, Indusind Bank, NMDC, Shree Cement, United Breweries, Wockhardt and Yes Bank. The index contains 113 existing Indian constituents which accounts for around 8.6% of emerging markets’ capitalisation.
The FTSE Emerging Index is reviewed annually by the independent FTSE Index Advisory Committees. The committee is made up of leading local and international market professionals who approve all index changes and ensure that the index review complies fully with a set of highly transparent and publicly available index rules.
The FTSE Emerging Index is widely regarded as a leading measure of performance for emerging markets by global investors. In October 2012, Vanguard announced it had selected FTSE as the index benchmark provider for six international stock index funds including its Emerging Markets Stock Index Fund, the world’s largest emerging markets fund. This represented the largest ever international index provider benchmark switch.
Rohtas Handa, Managing Director, India commented, “Given the wide usage of the FTSE indices, like index-linked products and ETFs, index rebalance would have huge impact on the equity market, especially in the emerging markets in terms of capital flows. FTSE announces the review results prior to the rebalance effective date to ensure the market understand the index turnover and minimise the impact.”
Full details of all inclusions and exclusions for the FTSE Emerging Index can be obtained at www.ftse.com/allworld. All changes will be made effective after the close of trading on 18 March 2013.
In December 2012, the FTSE Policy Group approved the introduction of actual free float (rounded up to the next 1%) in all FTSE indices, including the FTSE Emerging Index to limit unnecessary turnover. This change will also take effect on the same date of the review changes.
The FAQ document for the actual free float changes is available here for more information.
More information about the FTSE Emerging including index rules governing the series is available at www.ftse.com/allworld.
