Developed market
In investing, a developed market is a country that is most developed in terms of its economy and capital markets. The country must be high income, but this also includes openness to foreign ownership, ease of capital movement, and efficiency of market institutions. This term is contrasted with developing market ( Emerging markets and frontier markets are types of developing markets.)
Dow Jones list
As of 2016, Dow Jones classifies the following 25 countries as developed markets:[1]
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FTSE Group list
FTSE Group, a provider of economic and financial data, assigns the market status of countries as Developed, Advanced Emerging, Secondary Emerging or Frontier on the basis of their economic size, wealth, quality of markets, depth of markets, breadth of markets. As of 29 January 2016, FTSE Group has classified 26 countries as developed markets:[2]
FTSE Criteria
Developed countries all have met criteria under the following categories[3]
- They are high income economies (as measured by the World Bank GNI Per capita Rating, 2008)
- Market and Regulatory Environment EMG EMG
- Formal stock market regulatory authorities actively monitor market (e.g., SEC, FSA, SFC)
- Fair and non-prejudicial treatment of minority shareholders
- Non or selective incidence of foreign ownership restrictions
- No objections or significant restrictions or penalties applied on the repatriation of capital
- Free and well-developed equity market
- Free and well-developed foreign exchange market
- Non or simple registration process for foreign investors
- Custody and Settlement
- Settlement - Rare incidence of failed trades
- Custody-Sufficient competition to ensure high quality custodian services
- Clearing & settlement - T +3 or shorter, T+7 or shorter for Frontier
- Stock Lending is permitted
- Settlement - Free delivery available
- Custody - Omnibus account facilities available to international investors
- Dealing Landscape
- Brokerage - Sufficient competition to ensure high quality broker services
- Liquidity - Sufficient broad market liquidity to support sizeable global investment
- Transaction costs - implicit and explicit costs to be reasonable and competitive
- Short sales permitted
- Off-exchange transactions permitted
- Efficient trading mechanism
- Transparency - market depth information / visibility and timely trade reporting process
- Derivatives
- Developed derivatives markets
- Size of Market
- Market Capitalisation
- Total Number of Listed Companies (as at 31st Dec 2008)
MSCI list
As of February 2015, MSCI classified the following 26 countries as developed markets:[4]
These are the countries used in the MSCI World index.
Russell list
As of August 2015, Russell Investments considers the following 24 countries developed markets:[5]
S&P list
As of January 2016, Standard and Poor's classifies the following 25 countries as developed markets:[6]
Table
See also
References
- ↑ Dow Jones Developed Markets Indices.
- ↑ FTSE Developed Index, p. 3.
- ↑ http://www.ftse.com/Indices/Country_Classification/index.jsp and http://www.ftse.com/Indices/Country_Classification/Downloads/Asia_Pacific_Matrix_Sept_09.pdf
- ↑ MSCI Global investable Market Indexes Methodology - November 2015, p. 69 footnote #26. See also: MSCI developed markets.
- ↑ Russell Global Index, pp. 57-58.
- ↑ S&P Global BMI, pp. 27-28.
- ↑ S&P Global Equity Indices Monthly Update February 2016.
- ↑ FTSE Developed Index, p. 3.
- ↑ MSCI Global investable Market Indexes Methodology - November 2015, p. 69 footnote #26. See also: MSCI developed markets.
- ↑ Russell Global Index, pp. 57-58.
- ↑ S&P Global BMI, pp. 27-28.