What is the S&P/Citigroup Broad Market Index (BMI) Global Ex-U.S.
The S&P/Citigroup Broad Market Index (BMI) Global Ex-U.S. is a market capitalization-weighted index maintained by Standard and Poor's that provides a broad measure of global equities markets, excluding the U.S. market. It is a subset of the S&P/Citigroup Broad Market Index (BMI) Global, which includes approximately 11,000 companies in more than 47 countries covering both developed and emerging markets. The S&P/Citigroup Broad Market Index (BMI) Global Ex-U.S. contains approximately 8,400 stocks.
BREAKING DOWN S&P/Citigroup Broad Market Index (BMI) Global Ex-U.S.
A country is eligible for inclusion in the S&P/Citigroup Broad Market Index (BMI) Global Ex-U.S. if it has float-adjusted market capitalization of US$1 billion or more and its market capitalization weight is at least 40 basis points in either the emerging market or developed world indexes. A company is eligible to be included in the index if it has float-adjusted market value of US$100 million or more, with a minimum of US$50 million value traded over the past 12 months.
Now known as the S&P Global Broad Market Index (BMI) Global Ex-U.S., the index provides diversified exposure to non-U.S. equity markets that comprised approximately half of the $54.8 trillion global equity market at the end of 2017. While investors cannot gain exposure to the index directly through an index fund or ETF, many global equity investment choices provide similar exposure to international developed, emerging and liquid frontier markets.
The S&P Global Broad Market Index (BMI) Global Ex-U.S. is comprised of the S&P Developed BMI and S&P Emerging BMI indexes and is intended to measure international stock market performance. It a subset of the S&P Global Broad Market Index, one of the three components of S&P Global Equity Index series that also includes the S&P/IFCI and the S&P Frontier BMI.
Benefits of the S&P/Citigroup Broad Market Index (BMI) Global Ex-U.S.
Combining the common stocks of all publicly-traded companies with adequate liquidity that are domiciled outside the U.S. into a single index is an easy way to compare the size of the U.S. market to the rest of the world. Such information can highlight the importance of globalization and help investors overcome the problem of home bias that plagues most portfolios. U.S. investors allocate approximately 90 percent of their equity investments to U.S. companies while British investors allocate 80 percent of their equity allocation to domestic companies, according to Morgan Stanley Capital International (MSCI).
By requiring a minimum market capitalization of $100 million and a minimum level of liquidity, the index ensures that its constituent companies can be efficiently traded without generating adverse price impacts.