S&P Dow Jones unveils Colombia index, licensed to Horizons ETFs

May 28th, 2014 | By | Category: Equities

S&P Dow Jones Indices has unveiled the S&P Colombia Select Index, an index tracking the performance of the largest and most liquid stocks domiciled in Colombia.

S&P Dow Jones unveils Colombia index, licensed to Horizons ETFs

S&P Dow Jones Indices has unveiled the S&P Colombia Select Index, an index tracking the performance of the largest and most liquid stocks domiciled in Colombia.

The index uses a modified market capitalization weighting scheme, providing investors with a broad, yet replicable index covering the Colombian equity market.

The underlying universe for the index is all stocks in the S&P Colombia BMI that trade on the Colombia Stock Exchange (the Bolsa de Valores de Colombia or BVC) as domestic stocks.

Among other criteria, stocks must also have a float-adjusted market capitalization equal to or greater than US$200 million, as of the rebalancing reference date, and average daily trading volume of at least US$125,000 over three, six and twelve-month periods.

Modifications are made to market capitalization weights to reflect available float, reduce single stock and/or sector concentration, and enhance index basket liquidity. The concentration modification ensures that, as of rebalancing date, no sector can represent more than 40% of the index and no single stock can have a weight of more than 15%.

Alka Banerjee, Managing Director and Head of Global Equity Indices at S&P Dow Jones Indices, commented: “S&P Dow Jones Indices is excited to bring its world renowned skill in developing transparent, strongly governed, and representative stock market indices to Colombian investors. The S&P Colombia Select Index employs many of the traits commonly associated with our leading indices. It also provides investors with a means of measuring the largest and most liquid stocks headquartered in Colombia while reducing single stock and sector concentration within the index.”

The index will soon be available to Colombian investors in investable format, following its licensing to Horizons ETFs’ Latin American operation to serve as the basis for a forthcoming exchange-traded fund based (ETF) upon the index to be listed on BVC.

Howard Atkinson, Managing Director of Horizons ETFs Management (Latam), said: “We have a strong business relationship globally with S&P Dow Jones Indices and are pleased to be able to offer their top-tier index strategies to Latin American investors. With the S&P Colombia Select Index, S&P Dow Jones Indices has used their vast indexing credentials to develop a superior offering for Colombian investors that reduce the sector concentration risks that exist in the current Colombian stock market indexes.”

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