JPMorgan to debut new frontier market local-currency bond index by September end

JPMorgan is set to introduce its long-awaited frontier market local-currency government bond index, GBI-EM Edge, by the close of September, providing a benchmark for close to $330 billion of debt across 26 fast-growing economies. The index will give the biggest weight to countries such as Egypt, Vietnam, Morocco, Kazakhstan, Bangladesh, Pakistan, Nigeria and Sri Lanka, while capping any single country's exposure at 8 percent.

Eligibility requires bonds of $250 million or more and at least 2.5 years remaining to maturity. African issuers will make up almost 45 percent of the composition, and the Frontier Asia segment will contribute nearly one-third. The index is projected to deliver average nominal yields of about 10.4 percent, roughly 440 basis points higher than JPMorgan's existing emerging-market local-currency index. Analysts note that the product responds to growing investor demand for high-yielding sovereign debt and could help deepen local-currency markets in frontier economies.