JP Morgan said on Thursday that Saudi Arabia and the Philippines will join its widely tracked local-currency emerging market bond index, the GBI-EM, over 10 months starting January 29, 2027, The Economic Times reported.
The move brings Saudi riyal sovereign sukuk and Philippine peso government bonds into the index. Saudi Arabia's weight is expected to reach 2.71% when fully phased in, slightly above what was flagged in April, and the Philippines' 1.64%, marginally lower.
The index will add nine Philippine bonds worth $50 billion and eight Saudi sukuk worth $79 billion.
The change that touches India
As part of the update, JP Morgan will lower the "country cap", the maximum share any one country can hold in the diversified index, to 9% from 10%.
As a result, major markets including China, India, Mexico, Malaysia and Indonesia will have their weights reduced to the new limit, according to the report. Tekedia also reported that India is among the large constituents affected. Neither report gave India's exact weight after the change.
Why it matters
A lower cap means funds that track the index would hold a slightly smaller share of the largest markets, India among them, than before, even as two new markets join the same index.
The change takes effect gradually, and the final weights will depend on the phase-in.
This report is for information only and is not investment advice.