JPMorgan Chase is finalizing the launch of a new index tracking local currency bonds in frontier markets, Reuters reports.
The initiative aims to meet increasing investor demand for riskier, high-yield debt and diversification opportunities. This move follows the bank's introduction of the hard-currency NEXGEM frontier index 15 years ago.
The proposed index expects to include 20 to 25 countries. Egypt, Vietnam, Kenya, Pakistan, and Nigeria are slated to receive the largest weightings.
JPM has proposed a cap to limit any single country's weighting. Consulted investors noted suggestions range from 8% to 10%. JPMorgan has not officially commented on the new index.