JPMorgan Unveils Frontier Market Bond Index Covering $330B Debt

JPMorgan is set to launch its 'GBI-EM Edge' benchmark index by the end of September, covering nearly $330 billion of debt from 26 countries. This new frontier market local-currency government bond index will provide investors with a benchmark for emerging markets.

The index includes countries such as Egypt, Vietnam, Morocco, and Bangladesh, which have seen strong market rallies in recent years. According to the World Bank, frontier economies are home to a fifth of the world's population but account for just 3.1% of global capital flows and less than 5% of global GDP.

JPMorgan has been working on this new index for years in response to growing investor appetite for high-yielding debt. The 'GBI-EM Edge' will track almost $330 billion of local-currency emerging market debt, with a nominal yield of around 10.4%, roughly 440 basis points higher than the mainstream EM local currency index.