Index provider Standard and Poor’s has launched a new Eurozone government bond index.

According to the provider, the S&P Eurozone Government Bond Index is weighted by market value and is intended to measure the performance of the “developed” European government bond market.

All European government bond types are included in the index except for inflation-indexed, floating-rate, and zero-coupon bonds. To qualify for inclusion, bonds must be denominated in euros, have a minimum issue size of at least €1 billion and a maturity greater than or equal to one year.

On 30 October 2009, country weightings in the index were: Italy (23.3%), Germany (21.8%), France (20.2%), Spain (9.1%), Belgium (6.1%), Greece (5.4%), The Netherlands (5.1%), Austria (3.8%), Portugal (2.4%), Ireland (1.7%) and Finland (1.1%). Of the 16 Eurozone countries, 11 are currently represented in the index, while Cyprus, Luxembourg, Malta, Slovenia and Slovakia do not fulfil the criteria.

There are also sub-indices, which differentiate bond issues by maturity bands. The sub-indices cover bonds with 1-3, 3-5, 5-7, 7-10 and 10+ years to maturity.

The index will be rebalanced monthly.

The new S&P index has broadly similar country weightings to the indices most commonly used in the European ETF market for tracking diversified Eurozone government bonds: the iBoxx € Sovereigns Eurozone index and the EuroMTS global index.