New index launched for frontier and smaller emerging markets

London: Global index compiler MSCI Barra on Tuesday launched an index to track stocks in frontier and smaller emerging markets including Argentina, Egypt, Pakistan, Peru and the Philippines.

MSCI, a provider of benchmark indexes to fund managers and other investors, said it would also launch a more tradable proxy for its new index, which was designed as a benchmark for smaller countries in its emerging markets index and all markets in its frontier markets index.

"Frontier markets are typically characterised by limited market accessibility, small company size and low liquidity, while emerging markets are usually expected to provide higher levels of openness, investability and efficiency," MSCI said in a statement.

Besides frontier markets, the new MSCI Frontier Emerging Markets Index would also include more developed markets from its emerging markets index such as Argentina, Colombia, Egypt, Jordan, Morocco, Pakistan, Peru and the Philippines.

The more tradable proxy for the new index, MSCI Frontier Emerging Markets APEX Index, will include its constituent countries except Mauritius, Sri Lanka, Ukraine and Vietnam because of poor liquidity, foreign exchange restrictions and capital controls.