According to the announcement, it is a benchmark index designed to measure the largest and most liquid publicly-listed Latin American infrastructure companies that meet certain investability requirements. The launch of the S&P Latin America Infrastructure Index follows the introduction of the S&P MILA 40 earlier in the month. Together, S&P Indices says these are “providing investors in Latin America with a means of measuring the performance of leading companies in the region”.
Using companies’ business descriptions and “cluster” Global Industry Classification Standard (GICS®) classification techniques, the S&P Latin America Infrastructure Index methodology identifies constituents belonging to the Energy, Transportation, Telecommunications and Utilities clusters. The Index uses a modified market capitalization weighting scheme with constituent weights determined by size. No single constituent with the S&P Latin America Infrastructure Index can have a weight of more than 8% in the Index.
“A strong infrastructure raises the productivity and competitiveness of Latin American countries in terms of their ability to compete with other fast-growing, emerging market economies,” says Alka Banerjee, Vice President at S&P Indices. “The S&P Latin America Infrastructure Index allows investors to measure the performance of those publicly traded companies that are setting the standard for developing the basic facilities, services and systems in the region.”
As of August 31, 2011, the top five companies by weight in the S&P Latin America Infrastructure Index represent 37.4% of the Index. The companies are:
- America Movil SAB de CV L ADR (Telecommunications, Mexico),
- Lan Airlines S.A. ADR (Transportation, Chile),
- Empresa Nacional de Electricidad SA (Utilities, Chile);
- CPFL Energia SA ADR (Utilities, Brazil), and
- Enersis SA ADR (Utilities, Chile).
Simultaneously, S&P Indices is offering risk control versions of the S&P Latin America Infrastructure Index, which the firm says allows investors to limit volatility by replacing equities with a cash component if volatility exceeds a specified level. The risk control versions will be for 10%, 12% 15%, and 18% volatility levels.
The S&P Latin America Infrastructure Index is a member of the S&P Thematic Indices family, a series “designed to provide exposure to various investment themes that cut across traditional industry definitions,” according to a press release.
Additional information is available at http://www.indices.standardandpoors.com.
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