Emerging market

S&P SMIT 40 Index to serve as basis for Commerzbank ETF

S&P Dow Jones Indices has licensed the S&P SMIT 40 Index to Commerzbank for the launch of an ETF based upon the index – the ComStage ETF S&P SMIT 40 Index TRN.

The S&P SMIT 40 Index is designed to measure the performance of 40 leading companies from four emerging markets: South Korea, Mexico, Indonesia and Turkey (SMITs).

The S&P SMIT 40 Index represents the four largest markets of the Next Eleven (N-11).  The N-11, a concept developed by Goldman Sachs Asset Management (GSAM), are the 11 countries (Bangladesh, Egypt, Indonesia, Iran, Mexico, Nigeria, Pakistan, Philippines, Turkey, South Korea, and Vietnam) recognised by GSAM as having the potential for strong long-term growth (in addition to the BRIC countries).

The index is designed to be representative of these four equity markets yet be efficient to replicate in order to support financial products.
 
“The S&P SMIT 40 Index is S&P Dow Jones Indices’ response to the growing investor interest in the SMIT countries,” says John Davies, vice president of global exchange traded products licensing at S&P Dow Jones Indices. “We are pleased that Commerzbank AG has licensed the index to serve as the basis for their ETF.”
 
“Many emerging countries have displayed significant growth in their economic performance in the past decade. After the BRIC States, the next four largest markets are: South Korea, Mexico, Indonesia and Turkey – or ‘SMIT’ for short. These countries unite a major population growth coupled with a positive economic development. Incidentally, the SMIT States are the largest representatives of the so-called ‘Next Eleven’,” says Thomas Meyer zu Drewer, who heads the ETF business of Commerzbank under the ComStage brand.
 
The S&P SMIT 40 Index employs a transparent, rules-based methodology.  To be eligible for inclusion, stocks must have a float-adjusted market capitalisation above USD1bn and three-month average daily value traded above USD5m. The largest ten eligible stocks in each country based on float-adjusted market capitalisation are included in the index, and the four countries are equally-weighted to enhance geographic diversification.  

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