- Portugal will be added to the FTSE World Government Bond Index (WGBI) effective with the November 2024 index profiles
FTSE Russell, the global index provider, has published the results of its March 2024 country classification review for equities and fixed income.
Fixed Income
FTSE Russell announces that Portugal will be added to the FTSE World Government Bond Index (WGBI) after its local currency fixed-rate government bond market met all three eligibility criteria (market size, credit rating and a minimum Market Accessibility Level of “2”) for inclusion. Index inclusion will be effective from November 2024 and Portugal is projected to comprise 0.61% of the FTSE WGBI on a market value weighted basis.
South Korea will remain on the FTSE Fixed Income Country Classification Watch List for the potential reclassification of its Market Accessibility Level from 1 to 2. FTSE Russell acknowledges that local market authorities have made meaningful progress in the implementation of initiatives intended to improve the accessibility of South Korean government bonds for international investors, which would facilitate the fulfilment of the criteria for a Market Accessibility Level of 2 and inclusion in the FTSE WGBI.
India will remain on the FTSE Fixed Income Country Classification Watch List for the potential reclassification of its Market Accessibility Level from 0 to 1, and consideration for inclusion in the FTSE Emerging Markets Government Bond Index (EMGBI). FTSE Russell intends to continue its valuable dialogue with the Reserve Bank of India and welcomes feedback from an expanding cohort of international investors entering the Indian government bond market on the practicalities of their investment experience.
Switzerland will be removed from the FTSE Fixed Income Country Classification Watch List.
View the full FTSE Fixed Income Country Classification Announcement.
Equities
Egypt will remain on the Watch List for potential demotion from Secondary Emerging to Unclassified market status. Market participants report that previous delays in the ability of international institutional investors to repatriate capital from Egypt have been addressed, following Egypt securing investment from the Government of the United Arab Emirates and reaching a staff level agreement with the International Monetary Fund (IMF). Consequently, FTSE Russell will recommence implementing intra-review index changes for Egyptian index constituents effective from the open on Monday 01 April 2024.
As this improvement is a recent development, FTSE Russell will continue to monitor the market and provide an update on the Watch List status of Egypt by the end of June 2024.
Pakistan will remain on the Watch List for potential demotion from Secondary Emerging to Frontier market status. Over the last few years, Pakistan has experienced a steady decrease in its index weight within FTSE Russell global benchmarks. This has resulted in the market failing to meet the minimum investable market capitalisation exit level threshold required to retain a Secondary Emerging market status.
If Pakistan fails the minimum investable market capitalisation and securities count exit level thresholds, based on data as of the close on Friday 28 June 2024, then subject to final ratification by the FTSE Russell Index Governance Board, Pakistan will be demoted from Secondary Emerging to Frontier market status. This action will be taken in conjunction with the September 2024 index reviews that are effective from the open on Monday 23 September 2024. FTSE Russell will provide an update on the Watch List status of Pakistan at the beginning of July 2024.
Vietnam will remain on the Watch List for a possible reclassification from Frontier to Secondary Emerging market status as the market has yet to meet the settlement requirements stipulated in the FTSE Equity Country Classification Framework. The Vietnamese authorities remain committed to pursuing the various regulatory reforms required to attain Emerging market status as well as upgrading the main trading platform, which FTSE Russell continues to monitor. The next update on the status of Vietnam will be provided as part of the FTSE Equity Country Classification annual review of equity markets at the end of September 2024.
View the full FTSE Equity Country Classification Announcement.
David Sol, Global Head of Policy and Governance at FTSE Russell, comments:
“At the heart of FTSE Russell’s approach to the classification of equity and fixed income markets is the ongoing monitoring of the accessibility and economic realities of global markets. Through our proactive programme of engagement and market analysis, FTSE Russell equity and fixed income indices remain fit for purpose and reflect both the opportunities and challenges faced by investors. Our semi-annual reviews are transparent and informative. They describe both the status quo and a path forward for the evolution of our indices and associated frameworks”.
More information on the Equity Country Classification framework and the Fixed Income Country Classification framework can be found on our website. The next update will be published in September 2024.
Notes to editors
A summary of the relevance of each country classification level where it relates to global index eligibility is included below.
Fixed Income
| Market Accessibility level | Eligible FTSE Russell fixed income index |
| 2 | FTSE World Government Bond Index (WGBI) |
| 1 | FTSE Emerging Markets Government Bond Index (EMGBI) |
| 0 | FTSE Frontier Emerging Markets Index |
Equity
| Country Classification | Eligible FTSE Russell equity index |
| Developed | FTSE Developed Index |
| Advanced Emerging | FTSE Emerging Index |
| Secondary Emerging | FTSE Emerging Index |
| Frontier | FTSE Frontier Index |
Contacts
About FTSE Russell, an LSEG business
FTSE Russell is a global index leader that provides innovative benchmarking, analytics and data solutions for investors worldwide. FTSE Russell calculates thousands of indexes that measure and benchmark markets and asset classes in more than 70 countries, covering 98% of the investable market globally.
FTSE Russell index expertise and products are used extensively by institutional and retail investors globally. Approximately $15.9 trillion is benchmarked to FTSE Russell indexes. Leading asset owners, asset managers, ETF providers and investment banks choose FTSE Russell indexes to benchmark their investment performance and create ETFs, structured products and index-based derivatives.
A core set of universal principles guides FTSE Russell index design and management: a transparent rules-based methodology is informed by independent committees of leading market participants. FTSE Russell is focused on applying the highest industry standards in index design and governance and embraces the IOSCO Principles. FTSE Russell is also focused on index innovation and customer partnerships as it seeks to enhance the breadth, depth and reach of its offering.
FTSE Russell is wholly owned by London Stock Exchange Group.
For more information, visit FTSE Russell.
© 2024 London Stock Exchange Group plc and its applicable group undertakings (“LSEG”). LSEG includes (1) FTSE International Limited (“FTSE”), (2) Frank Russell Company (“Russell”), (3) FTSE Global Debt Capital Markets Inc. and FTSE Global Debt Capital Markets Limited (together, “FTSE Canada”), (4) FTSE Fixed Income Europe Limited (“FTSE FI Europe”), (5) FTSE Fixed Income LLC (“FTSE FI”), (6) FTSE (Beijing) Consulting Limited (“WOFE”) (7) Refinitiv Benchmark Services (UK) Limited (“RBSL”), (8) Refinitiv Limited (“RL”) and (9) Beyond Ratings S.A.S. (“BR”). All rights reserved.
FTSE Russell® is a trading name of FTSE, Russell, FTSE Canada, FTSE FI, FTSE FI Europe, WOFE, RBSL, RL, and BR. “FTSE®”, “Russell®”, “FTSE Russell®”, “FTSE4Good®”, “ICB®”, “Refinitiv” , “Beyond Ratings®”, “WMR™” , “FR™” and all other trademarks and service marks used herein (whether registered or unregistered) are trademarks and/or service marks owned or licensed by the applicable member of LSEG or their respective licensors and are owned, or used under licence, by FTSE, Russell, FTSE Canada, FTSE FI, FTSE FI Europe, WOFE, RBSL, RL or BR. FTSE International Limited is authorised and regulated by the Financial Conduct Authority as a benchmark administrator. Refinitiv Benchmark Services (UK) Limited is authorised and regulated by the Financial Conduct Authority as a benchmark administrator.
All information is provided for information purposes only. All information and data contained in this publication is obtained by LSEG, from sources believed by it to be accurate and reliable. Because of the possibility of human and mechanical inaccuracy as well as other factors, however, such information and data is provided "as is" without warranty of any kind. No member of LSEG nor their respective directors, officers, employees, partners or licensors make any claim, prediction, warranty or representation whatsoever, expressly or impliedly, either as to the accuracy, timeliness, completeness, merchantability of any information or LSEG Products, or of results to be obtained from the use of LSEG products, including but not limited to indices, rates, data and analytics, or the fitness or suitability of the LSEG products for any particular purpose to which they might be put. The user of the information assumes the entire risk of any use it may make or permit to be made of the information.
No responsibility or liability can be accepted by any member of LSEG nor their respective directors, officers, employees, partners or licensors for (a) any loss or damage in whole or in part caused by, resulting from, or relating to any inaccuracy (negligent or otherwise) or other circumstance involved in procuring, collecting, compiling, interpreting, analysing, editing, transcribing, transmitting, communicating or delivering any such information or data or from use of this document or links to this document or (b) any direct, indirect, special, consequential or incidental damages whatsoever, even if any member of LSEG is advised in advance of the possibility of such damages, resulting from the use of, or inability to use, such information.
No member of LSEG nor their respective directors, officers, employees, partners or licensors provide investment advice and nothing in this document should be taken as constituting financial or investment advice. No member of LSEG nor their respective directors, officers, employees, partners or licensors make any representation regarding the advisability of investing in any asset or whether such investment creates any legal or compliance risks for the investor. A decision to invest in any such asset should not be made in reliance on any information herein. Indices and rates cannot be invested in directly. Inclusion of an asset in an index or rate is not a recommendation to buy, sell or hold that asset nor confirmation that any particular investor may lawfully buy, sell or hold the asset or an index or rate containing the asset. The general information contained in this publication should not be acted upon without obtaining specific legal, tax, and investment advice from a licensed professional.
