MSCI Inc. announced the conclusions from its recent consultation with the investment community on proposed changes to the methodology for the MSCI Frontier Markets 100 Index….
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MSCI will implement all the proposed changes announced on March 3, 2014. In particular, MSCI will:
– Change the parent index for the MSCI Frontier Markets 100 Index from the MSCI Frontier Markets Index to the MSCI Frontier Markets Investable Market Index
– Apply a higher minimum free float‐adjusted market capitalization requirement compared to the new parent index
– Apply a cap of 40% to the cumulative weight of the two largest countries in the MSCI Frontier Markets 100 Index
– Allow the number of constituents in the MSCI Frontier Markets 100 Index to fluctuate between 85 and 115 at the time of Semi‐Annual Index Reviews
As a reminder, MSCI announced on June 11, 2013 its decision to reclassify the MSCI Qatar and MSCI UAE Indexes from Frontier Markets to Emerging Markets coinciding with the May 2014 Semi‐Annual Index Review. Once the reclassification takes place, constituents of the MSCI Qatar and MSCI UAE Indexes will become ineligible for inclusion in the MSCI Frontier Markets 100 Index. The methodological changes aim to address the impact of this reclassification on the MSCI Frontier Markets 100 Index.
The changes resulting from the transition of the MSCI Frontier Markets 100 Index to the revised methodology as well as removal of the constituents of the MSCI Qatar and the MSCI UAE Indexes will be implemented in seven phases. The changes will be implemented as of the close of the last business day of each month with the first phase coinciding with the May 2014 Semi‐Annual Index Review and the last phase coinciding with the November 2014 Semi‐Annual Index Review.
Source: ETFWorld – Msci
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