The MSCI Frontier Markets Indices provide broad representation of the equity opportunity set while taking investability requirements into consideration within each market. MSCI classifies 34 countries as Frontier Markets, 26 of which are included in the MSCI Frontier Markets Index.
The MSCI Frontier Market Indices include large, mid and small cap representation and cover approximately 98% of the investable equity universe across all Frontier Markets countries.
They are constructed using a building block methodology common to all MSCI Global Equity Indices. The MSCI Frontier Markets Indices can be segmented by size, sector and geography, allowing for consistent global views and cross regional comparisons. The MSCI Frontier Markets Indices can also be combined with the MSCI Emerging Markets and MSCI All Country Indices to create a range of extended regional and global composite indices.
The MSCI Frontier Markets 100 Index aims to capture the performance of frontier markets while putting a stronger emphasis on tradability compared to the broader parent index, the MSCI Frontier Markets Index. The MSCI Frontier Markets 100 Index is limited to 100 constituents at the time of an index review.
Transparent, investable and replicable index construction
MSCI Frontier Markets Indices are calculated and maintained according to the rules-based MSCI Global Investable Market Indices Methodology. The methodology applies liquidity screens and minimum size references (reflecting the specific structure of countries within the Frontier Markets) to help ensure that the MSCI Frontier Markets Indices remain both investable and replicable.
MSCI regularly reviews the market classification of all countries included (or under consideration for inclusion) in its global equity universe based on extensive discussions with the investment community. Using the MSCI Market Classification Framework, MSCI examines each country’s economic development, size, liquidity and market accessibility in order to be classified in a given investment universe. Each June, MSCI communicates its conclusions on the list of countries under review and announces the new list of countries, if any, under review for potential market reclassification in the upcoming cycle.
Coinciding with the May 2014 Semi Annual Index Review, Qatar and the United Arab Emirates will be reclassified as Emerging Markets from Frontier Markets.
The MSCI Gulf Cooperation Council (GCC) Countries and the MSCI Arabian Markets Indices are designed to provide institutional investors with an asset allocation and performance measurement framework for the equity markets in the Middle East and North Africa region. Find out more.