FTSE Group and Emerging Portfolio Funds Research (EPFR Global) have launched a new emerging market focused index - the FTSE EPFR EM Fund Flows Index.
According to FTSE Group, the new index is a factor-adjusted version of the FTSE Emerging Index that overlays ‘country flows’ data on top of a market cap weighted index.
Country flows data tracks investment allocation and flows in funds covering stock markets in developed and emerging countries.
FTSE claims that the new index gives investors a clearer picture of how these factors are driving emerging markets and can help improve portfolio performance by influencing an investor’s country weight adjustments.
Asset owners and institutional investors globally can use the FTSE EPFR Index to enhance their emerging markets portfolio, based on recommended country weights linked to countries’ investment flows Country investment flows combine fund flow and country weight data to track the flow of money into world stock markets.
The fund flow data tracks the amount of cash flowing in and out of thousands of ETFs and mutual funds monitored by EPFR world-wide, while the country weights data tracks fund managers’ portfolio allocations at month-end across various emerging markets.
The index country weightings will be revised quarterly based on the country flows data.