What it is:
How it works/Example:
The S&P/IFCI covers approximately 1889 companies from 20 leading emerging countries including China, Brazil, South Korea, Taiwan and India (which have the 5 highest weightings in the index).
The S&P/IFCI is also one of the three indices included in the S&P Global Equity Index series. The other two, S&P Frontier BMI and the S&P Global BMI, cover frontier markets and developed/emerging markets, respectively.
To be considered for inclusion in the index, all listed companies within the constituent country must meet certain criteria, including a market capitalization of at least U.S. $200 million and an annual trading volume of U.S. $100 million. For a country to be admitted to the index, it must be politically stable and have legal property rights and procedures, among other criteria.
Why it matters:
The S&P/IFCI can be used as a benchmark for the leading emerging market equities portion of an investor's portfolio and to track the performance of a specific leading emerging market's stock, mutual fund, or ETF.
Though there is no ETF that directly tracks the S&P IFCI, an investor may consider simply investing in a leading emerging market ETF, such as the Vanguard ETF (NYSE:VWO).
The Bloomberg symbol for this index is IDRICOPD.