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Commerzbank Launches First ETF On SMIT 40 Index
By Rebecca Hampson | 29 January, 2013

Commerzbank’s exchange-traded fund arm, ComStage, has launched the first ETF tracking the S&P SMIT 40 index, which offers access to companies from South Korea, Mexico, Indonesia and Turkey (SMIT).

The ETF will track the S&P SMIT 40 Net Total Return EUR Index, which looks at the performance of 40 leading companies from SMIT. It is launched on Deutsche Borse’s Xetra platform and has a total expense ratio of 0.60 per cent.

The S&P SMIT 40 Index represents the four largest markets of the Next Eleven (N-11), a concept developed by Goldman Sachs Asset Management (GSAM), which includes the eleven countries (Bangladesh, Egypt, Indonesia, Iran, Mexico, Nigeria, Pakistan, Philippines, Turkey, South Korea, and Vietnam) considered as having the potential for strong long-term growth. The Index is designed to be representative of these four equity markets.

Thomas Meyer zu Drewer, head of ComStage, said in a statement: “Many emerging countries have displayed significant growth in their economic performance in the past decade. After the BRIC States, the next four largest markets are: South Korea, Mexico, Indonesia and Turkey – or ‘SMIT’ for short. These countries unite a major population growth coupled with a positive economic development. Incidentally, the SMIT States are the largest representatives of the so-called ‘Next Eleven.”

For stocks to be included in the S&P SMIT 40 index they must have a float-adjusted market capitalisation above US$1 billion and three-month average daily value traded above US$5 million. The largest ten eligible stocks in each country based on float-adjusted market capitalisation are included in the index, and the four countries are equally-weighted to enhance geographic diversification.

 

 

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