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The JPMorgan Government Bond Index-Emerging Markets (GBI-EM) indices are comprehensive emerging market debt benchmarks that track local currency bonds issued by Emerging market governments. The index was launched in June 2005 and is the first comprehensive global local Emerging Markets index. As Emerging Market governments look increasingly toward their domestic market for sources of finance, investors are looking more closely at local markets in search for higher yield and greater diversification.
As external debt spreads compress and opportunities seem more appealing in local rates, the likely combination of increasing demand and supply will pave the way for deeper and broader local markets, which the GBI-EM will attempt to capture. The launch of the GBI-EM was followed by the Diversified versions for GBI-EM and GBI-EM BROAD in January 2006. The GBI-EM GLOBAL, launched in November 2006, is the latest addition to the GBI-EM family of indices, providing a readily investable version of the GBI-EM BROAD by excluding China and India. The GBI-EM indices is composed of only those countries from the GBI universe that meet criteria for an Emerging Market, resulting in 18 countries from four regions. The regional sub-division of the indices consists of Asia, Europe, Latin America, and Middle East/Africa.
GBI-EM Broad
GBI-EM Broad is the all-encompassing index. It includes all eligible countries regardless of capital controls and/or regulatory and tax hurdles for foreign investors. As of November 2013 the following 18 emerging market economies were part of the GBI-EM Broad index: Brazil, Chile, China, Colombia, Hungary, India, Indonesia, Malaysia, Mexico, Nigeria, Peru, Philippines, Poland, Romania, Russia, South Africa, Thailand, and Turkey.
JP Morgan announced that Nigeria will be phased out of the index over a 2 month period effective September 30, 2015. Nigeria was placed on Index Watch in January following a series of administrative measures by the Central Bank of Nigeria that impeded the ability of foreign investors to access the FX market.
GBI-EM Global
GBI-EM Global is an investable benchmark that includes only those countries that are directly accessible by most of the international investor base. The GBI-EM GLOBAL excludes countries with explicit capital controls, but does not factor in regulatory/tax hurdles in assessing eligibility. Specifically, it includes all GBI-EM countries, as well as the Brazil NTN-F, LTN, and the Colombia local TES tasa fija bond. Classified as the most investable of all three indices, the GBI-EM GLOBAL consists of China, Indonesia, Malaysia, Thailand, Czech Republic, Hungary, Poland, Romania, Turkey, Brazil, Chile, Colombia, Mexico, Peru, India, Egypt and South Africa . Although the following restriction may exist, it will not result in country exclusion: Registration of the foreign investor with the local supervisory authorities or notification of transactions is not considered a significant restriction.
GBI-EM
GBI-EM, referred to as the replicable or narrow series, is the most restrictive series. It limits inclusion to only those countries that are readily accessible and where no impediments exist for foreign investors. As of July 2022 the GBI-EM is China, Indonesia, Thailand, Malaysia, Brazil, Mexico and South Africa. This index also uses a narrower version of eligible bonds for Colombia.
The 1997 Asian financial crisis was a period of financial crisis that gripped much of East and Southeast Asia during the late 1990s. The crisis began in Thailand in July 1997 before spreading to several other countries with a ripple effect, raising fears of a worldwide economic meltdown due to financial contagion. However, the recovery in 1998–1999 was rapid, and worries of a meltdown quickly subsided.
A real estate investment trust is a company that owns, and in most cases operates, income-producing real estate. REITs own many types of commercial real estate, including office and apartment buildings, studios, warehouses, hospitals, shopping centers, hotels and commercial forests. Some REITs engage in financing real estate. REITs act as a bridge between the worlds of housing and urban development on one hand, and institutional investors and financial markets on the other. They are typically categorized into commercial REITs (C-REITs) and residential REITs (R-REITs), with the latter focusing on housing assets such as apartments and single-family homes.
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An emerging market is a market that has some characteristics of a developed market, but does not fully meet its standards. This includes markets that may become developed markets in the future or were in the past. The term "frontier market" is used for developing countries with smaller, riskier, or more illiquid capital markets than "emerging". As of 2006, the economies of China and India are considered to be the largest emerging markets. According to The Economist, many people find the term outdated, but no new term has gained traction. Emerging market hedge fund capital reached a record new level in the first quarter of 2011 of $121 billion. Emerging market economies’ share of global PPP-adjusted GDP has risen from 27 percent in 1960 to around 53 percent by 2013. The ten largest emerging economies by nominal GDP are 4 of the 9 BRICS countries along with Mexico, South Korea, Indonesia, Turkey, Saudi Arabia, and Poland. The inclusion of South Korea, Poland, and sometimes Taiwan are questionable given they are no longer considered emerging markets by the IMF and World Bank If we ignore those three, the top ten would include Argentina and Thailand.
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A frontier market is a term for a type of developing country's market economy which is more developed than a least developed country's, but too small, risky, or illiquid to be generally classified as an emerging market economy. The term is an economic term which was coined by International Finance Corporation’s Farida Khambata in 1992. The term is commonly used to describe the equity markets of the smaller and less accessible, but still "investable" countries of the developing world. The frontier, or pre-emerging equity markets are typically pursued by investors seeking high, long-run return potential as well as low correlations with other markets. Some frontier market countries were emerging markets in the past, but have regressed to frontier status.
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