JPMorgan has introduced a local emerging markets index. The new index, named the JPMorgan Government Bond Index-Emerging Markets (GBI-EM), is local emerging markets debt benchmark that tracks local currency government bonds issued by emerging markets.
“The focus on local markets is expected to continue as on-shore and off-shore investors seek to diversify into new asset classes. With the GBI-EM we will provide investors with a well-defined and diligently-managed benchmark for local issues within the emerging markets universe,” Gloria M. Kim, vice president and manager of JPMorgan’s emerging markets index products, said. “It continues a legacy of premier index products developed by JPMorgan and underscores the firm’s dedication to developing emerging markets.”
“As external debt spreads compress and opportunities seem more appealing in local rates, the likely combination of increasing demand and supply should pave the way for deeper and broader local markets, which the GBI-EM will attempt to capture,” Drausio Giacomelli, head of Latin America Local Markets Research, said.
The GBI-EM closely follows the methodology of JPMorgan’s family of GBI indices, which are widely used as benchmarks for investors in developed market government bonds. The GBI-EM aggregates countries from the GBI universe that meet our criteria for an emerging market resulting in 19 countries from 4 regions. Countries included are Czech Republic, Hungary, Poland, Turkey, Russia, Brazil, Chile, Colombia, Mexico, China, India, Indonesia, Malaysia, Thailand, Hong Kong, Singapore, South Korea, Israel, and South Africa.
The GBI-EM consists of regularly traded, liquid fixed-rate, domestic currency government bonds to which international investors can gain exposure. Daily historical index levels and statistics are available from December 31, 2001. Clients and investors can access index levels and statistics for the GBI-EM on www.morganmarkets.com, Bloomberg page JPMX, and Reuters page EMBI01.