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Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail

S&P/IFCI Composite

What it is:

The S&P/IFCI Composite is a liquid and investable leading emerging market index. It is a subset of the S&P Emerging Plus Broad Market Index, with the addition of South Korea.

How it works (Example):

The S&P/IFCI covers approximately 1889 companies from 20 leading emerging countries including China, Brazil, South Korea, Taiwan and India (which have the 5 highest weightings in the index).

The S&P/IFCI is also one of the three indices included in the S&P Global Equity Index series. The other two, S&P Frontier BMI and the S&P Global BMI, cover frontier markets and developed/emerging markets, respectively. 

To be considered for inclusion in the index, all listed companies within the constituent country must meet certain criteria, including a market capitalization of at least U.S. $200 million and an annual trading volume of U.S. $100 million. For a country to be admitted to the index, it must be politically stable and have legal property rights and procedures, among other criteria.

The top 10 company constituents of this index fund can be found on the S&P/IFCI page.

Why it Matters:

The S&P/IFCI can be used as a benchmark for the leading emerging market equities portion of an investor's portfolio and to track the performance of a specific leading emerging market's stock, mutual fund, or ETF.

Though there is no ETF that directly tracks the S&P IFCI, an investor may consider simply investing in a leading emerging market ETF, such as the Vanguard Emerging Markets ETF (NYSE:VWO).

The Bloomberg symbol for this index is IDRICOPD.