Van Eck Global has introduced a new ETF that will track the Indonesian equity market. The Market Vectors Indonesia Index ETF (IDX) contains a small basket of 25 stocks that generate 50 percent or more of the revenue from this emerging-market country.
Companies within the index are weighted by their market capitalization and must have a market size greater than $150 million (U.S.) to be included. The target market coverage for the index is 90 percent of the free-float market capitalization of the investable equity universe in Indonesia. The index is maintained by Standard & Poor’s and is rebalanced on a quarterly basis.
“Like all emerging markets, Indonesia is challenged by the current global economic climate, but its ongoing reforms should help sustain its longer-term growth potential,” said Jan van Eck, principal at Van Eck Global.
Indonesian stocks declined by 49.3 percent in 2008 and have been hit hard by the global financial crisis along with other emerging markets.