Author: Gordon Platt





New York-based MSCI Barra, which is majority-owned by Morgan Stanley, plans to introduce a family of benchmark indexes next month covering 19 “frontier market” countries. Institutional investors want to look beyond existing developed and emerging markets in their search for new investment opportunities, says Henry Fernandez, chairman and CEO of MSCI Barra. These pre-emerging markets show a low correlation with US and developed markets generally.

Frontier markets are relatively small and illiquid markets that are too undeveloped to be classified as emerging but which offer opportunities for growth and diversification. Standard & Poor’s was the first to offer a frontier market index, which included 150 companies. Last October S&P; introduced the first investable frontier index, which includes 30 of the largest and most liquid components of its broader frontier index.

The MSCI Barra indexes will cover Bahrain, Bulgaria, Croatia, Estonia, Kazakhstan, Kenya, Kuwait, Lebanon, Mauritius, Niger, Oman, Qatar, Romania, Slovenia, Sri Lanka, Tunisia, Ukraine, United Arab Emirates and Vietnam.

In addition, MSCI Barra will provide a series of new regional and global composite indexes that combine the frontier market indexes with existing indexes.

Meanwhile, HSBC plans to introduce a $500 million frontier-market fund this month that will invest in companies in 60 countries.


Gordon Platt