JPMorgan to launch frontier market local currency debt index by month end, source says

JPMorgan is poised to unveil its frontier market local currency debt index later this month, according to sources. This new benchmark will track nearly $330 billion of debt from 26 countries, many of which have seen robust market performance in recent years. The index, dubbed GBI-EM Edge, will cover economies like Egypt, Vietnam, Morocco, Kazakhstan, Bangladesh, Pakistan, Nigeria, and Sri Lanka, with African nations representing nearly half of its composition.

The minimum bond weight will be capped at 8%, while the average nominal yield will hover around 10.4%, substantially higher than its emerging market counterpart. The index's inception aims to bolster local currency markets and support the economic growth of these burgeoning economies, which together host a fifth of the global population.

Backtesting indicates the index has outperformed mainstream benchmarks by 1.2 percentage points since 2017.