Oct 3 JPMorgan Chase & Co on Monday said
it was launching a global government bond index that will offer
fund managers higher potential yields by including a larger
percentage of emerging market bonds than traditional global bond
The index is called the JPM GBI aggregate diversified fund
and is made up of both investment grade and high yield bonds,
with an allocation of 80 percent developed market and 20 percent
emerging market bonds.
Global bond indexes typically only comprise about 2 to 4
percent emerging market bonds because certain countries are
excluded based on credit ratings.
JPMorgan said the new index is 94 percent comprised of
investment grade credits with an average index rating of
Aa3/AA-/AA- by Moody's, Standard & Poor's and Fitch,
"This split is a better reflection of both outstanding debt
stock in the global investable landscape and the increasing
economic contribution of EM countries to global GDP," said
Gloria Kim, head of J.P. Morgan Global Index Research Group, in
The allocation to the G3 currencies - the dollar, euro and
Japanese yen - totals only 57 percent of the fund, as compared
to 85 percent to 90 percent in traditional global government
bond indices, analysts said.
The index has a weighted average yield of 1.35 percent, Kim
said in the statement, and managers at JPMorgan see it as one of
their "flagship" indeces for the coming years.
The index does not exclude countries based on credit ratings
but does exclude countries with capital controls.
JPMorgan offers around 20 benchmark indices. Its other
flagship products include the JPMorgan EMBI index and
GBI-emerging markets index.
(Reporting by Dion Rabouin; Editing by Andrew Hay)