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Index IDEA: FTSE Russell & Deutsche AM examine emerging markets factors YTD

After a challenging start to 2016, emerging markets indexes have steadily trended upward since February 11th. According to global index provider FTSE Russell, the FTSE Emerging Index has risen 7.2% in 2016 as of April 26th.

Further analysis by FTSE Russell through its global factor indexes shows that the upward trend for emerging markets during this time period has been influenced by five major market factors; momentum, size, quality, value and low volatility. In fact, the FTSE Emerging Comprehensive Factor Index, which measures emerging markets equities through these five factors, has returned 9.2% year-to-date.  

Tom Goodwin, senior index research director at FTSE Russell:
“While the FTSE Emerging Index provides an effective high level snapshot of emerging markets performance, market participants who want a more nuanced view on an asset class might consider the FTSE Comprehensive Factor Indexes. The FTSE Emerging Comprehensive Factor Index is not a cap weighted index, but instead measures emerging markets securities by five specific market factors, using FTSE Russell’s ‘tilt-tilt” methodology to create a combined factor weight for each constituent within the index.”

Dodd Kittsley, Deutsche Asset Management:
“Investor demand and market sentiment for emerging markets has increased significantly over the past few months. In addition, investors have increasingly been adopting a factor approach to investing in markets through ETFs. The FTSE Emerging Comprehensive Factor Index brings these two trends together through the selection and weighting of emerging market stocks in an economically intuitive way based on years of cutting edge financial research.”

 

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FTSE Russell® is a trading name of FTSE, Russell, FTSE TMX and MTS Next Limited. “FTSE®”, “Russell®”, “FTSE Russell®” “MTS®”, “FTSE TMX®”, “FTSE4Good®” and “ICB®” and all other trademarks and service marks used herein (whether registered or unregistered) are trade marks and/or service marks owned or licensed by the applicable member of the LSE Group or their respective licensors and are owned, or used under licence, by FTSE, Russell, MTSNext, or FTSE TMX.

All information is provided for information purposes only. Every effort is made to ensure that all information given in this publication is accurate, but no responsibility or liability can be accepted by any member of the LSE Group nor their respective directors, officers, employees, partners or licensors for any errors or for any loss from use of this publication or any of the information or data contained herein.

Views expressed by Tom Goodwin and Dodd Kittsley of DEAM are as of April 26th and subject to change. These views do not necessarily reflect the opinion of FTSE Russell or the London Stock Exchange Group.

No member of the LSE Group nor their respective directors, officers, employees, partners or licensors make any claim, prediction, warranty or representation whatsoever, expressly or impliedly, either as to the results to be obtained from the use of the FTSE Emerging Index or the FTSE Emerging Comprehensive Factor Index or the fitness or suitability of the indexes for any particular purpose to which they might be put.

No member of the LSE Group nor their respective directors, officers, employees, partners or licensors provide investment advice and nothing in this IDEA should be taken as constituting financial or investment advice. No member of the LSE Group nor their respective directors, officers, employees, partners or licensors make any representation regarding the advisability of investing in any asset. A decision to invest in any such asset should not be made in reliance on any information herein. Indexes cannot be invested in directly. Inclusion of an asset in an index is not a recommendation to buy, sell or hold that asset. The general information contained in this publication should not be acted upon without obtaining specific legal, tax, and investment advice from a licensed professional.

No part of this information may be reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without prior written permission of the applicable member of the LSE Group. Use and distribution of the LSE Group index data and the use of their data to create financial products require a licence from FTSE, Russell, FTSE TMX, MTSNext and/or their respective licensors.

Past performance is no guarantee of future results. Charts and graphs are provided for illustrative purposes only. Index returns shown may not represent the results of the actual trading of investable assets.

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