The stock-index wars are heating up: Standard & Poor's completed its S&P Global 1200 Index with the release of its UK 150 Index on October 5. It is positioned as a major challenger to other prominent international index providers, such as Morgan Stanley Capital International, Dow Jones & Co., and FTSE International in London.
The new broad index covers 29 countries arranged in seven regions: the U.S., Europe, the U.K., Japan, Asia Pacific, Canada, and Latin America. The Global 1200, which is actually made up of 1,191 companies with a combined market capitalization of $20 trillion, accounted for about 70% of the world's total stock markets at its inception.
As the Global 1200 neared completion, S&P began launching its regional indexes more quickly. The S&P Asia Pacific 100 Index was launched on September 15. It covers Australia, Hong Kong, Malaysia, New Zealand, Singapore, South Korea, and Taiwan. Countries such as Thailand, Indonesia, and the Philippines were excluded because their markets are less liquid, said Elliot Shurgin, vice president index services. Australia represents about 42% of the index, while Hong Kong has the second-heaviest weighting at 24%.
The S&P Latin America 40 was launched on Sept. 30 and covers only four countries: Mexico, Brazil, Argentina, and Chile.
These new indexes reflect S&P's recognition of the growth in international investing and a desire for a stronger international presence, Shurgin said.
Jack Zwingli, retail markets group vice president at S&P Financial Services, said he expects that new investment products, including index futures, index funds, and exchange rate funds, based on the Global 1200 will be launched sometime in the future. Industry sub-sectors will also be launched, he said.