Country Classification in FTSE Global Benchmarks
FTSE understands that investors need an objective and consistent approach to the categorisation of markets as Developed, Emerging, Secondary Emerging or Frontier status within global benchmarks. To ensure that the classification of markets with the FTSE Global Equity Index Series (GEIS) remains accurate and up to date, FTSE works closely with both the institutional investor community and domestic market authorities to regularly review individual countries’ classification status.
Using a range of criteria which was developed in conjunction with international investors, FTSE conducts an annual review of the market status of all countries contained in its global benchmarks and assigns to Developed, Advanced Emerging, Secondary Emerging or Frontier categories. This process ensures that FTSE GEIS contains the most relevant and accurate information about market structure, offering investors risk management insight into the regulatory and trading practices of the markets contained in the global and regional indices they track.
In order to ensure that the potential reclassification of countries is transparent to investors, FTSE creates annual Watch List containing countries that may be subject to a change in their classification. Countries on the Watch List are reviewed for possible classification changes by the FTSE Policy Group each September. A full list of countries currently on the Watch List, and the results of the 2011 Annual Review can be viewed in the September 2011 Country Classification update.
At the September 2011 Country Classification Review, the FTSE Policy Group approved the following changes to the designation of countries in the FTSE Global Equity Index Series:
- Thailand – Promoted from Secondary Emerging to Advanced Emerging
- Ghana – Inclusion as a Frontier market
The change to Thailand’s market status was implemented in the FTSE Global Equity Index Series in March 2012. The inclusion of Ghana as a Frontier market will take effect from June 2012.