JPMorgan Unveils New Index for High-Yielding Frontier Market Bonds

JPMorgan is on track to launch its long-awaited frontier market local currency debt index by the end of September. The new 'GBI-EM Edge' benchmark will cover bonds from 26 countries, including Egypt, Vietnam, Morocco, and Nigeria.

The index aims to provide investors with a new benchmark for nearly $330 billion of debt across some of the world's fastest-growing economies. Frontier economies account for just 3.1% of global capital flows and less than 5% of global GDP, but their populations are expected to increase by 800 million over the next 25 years.

The source notes that African countries will account for almost 45% of the index, while 'Frontier Asia' - mainly Vietnam, Kazakhstan, Pakistan, and Bangladesh - will make up nearly a third. The maximum 'weighting' a country can have is capped at 8%.