|S&P Expands BRIC Coverage To Include High Yield|
|May 21, 2012 11:48 (CET)|
S&P Indices has expanded its range of BRIC indices to provide exposure to high yielding companies.
The index provider today launched the S&P BRIC High Yield Index and the S&P BRIC High Yield Risk Control Indices, both of which form part of the BRIC 40 index family that covers the 40 leading companies in Brazil, Russia, India and China.
Liquidity is a key factor in the new indices, which have been designed with products such as ETFs and index futures and options in mind.
Alka Banerjee, vice president at S&P Indices, said: “The focus of many BRIC investors has shifted to seeking high-yielding stocks while trying to control risk as market conditions continue to fluctuate. The launch of these new indices tries to address these concerns and underlines the leadership we’ve shown in developing our family of emerging market indices over the last decade.”
To qualify for inclusion in the high yield index, companies must meet stability, tradeability and diversification requirements, among which are that firms must have positive earnings per share before extraordinary items for the past 12 months. They must also trade on a developed exchange such as the Hong Kong Stock Exchange, the London Stock Exchange, Nasdaq or NYSE Euronext.The risk control index focuses on volatility, with the methodology varying its exposure to the high yield index—the volatility target ranges from 5 percent to 18 percent— based on systematic rules that also use cash and leverage to manage risk.