FTSE and QS Investors have expanded their FTSE Diversification Based Investing (DBI) index series to include emerging markets.

In keeping with the existing FTSE DBI Developed indices, which were launched in September 2010, the FTSE DBI All Emerging Markets index is designed to promote diversification across countries and industry sectors and is not market-cap weighted.

According to FTSE, the philosophy behind the series is that geography and industry are the primary drivers of global equity risk and return. It argues that a diversified portfolio allows it to avoid the concentration risk that occurs in market-cap weighted indices due to the momentum effects caused by market sentiment.

The new index is derived from the FTSE All Emerging Markets index series, which is market-cap weighted and is made up of large and mid-cap companies within advanced and secondary emerging markets. The index is rebalanced quarterly.