Developed market

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Further information: Developed country
Developed markets, according to the five data providers FTSE, MSCI, S&P and Dow Jones.
  recognised as Developed markets by all of these
  recognised as Developed markets by a majority of these
  recognised as Developed markets by a minority of these

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.

FTSE Group's list[edit]

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.[1] As of March 2012, FTSE Group has classified 26 countries as developed markets[2] (the list being identical to the S&P list, see below):

FTSE Criteria[edit]

Developed countries all have met criteria under the following categories[3]

  1. They are high income economies (as measured by the World Bank GNI Per capita Rating, 2008)
  2. Market and Regulatory Environment EMG EMG
    1. Formal stock market regulatory authorities actively monitor market (e.g., SEC, FSA, SFC)
    2. Fair and non-prejudicial treatment of minority shareholders
    3. Non or selective incidence of foreign ownership restrictions
    4. No objections or significant restrictions or penalties applied on the repatriation of capital
    5. Free and well-developed equity market
    6. Free and well-developed foreign exchange market
    7. Non or simple registration process for foreign investors
  3. Custody and Settlement
    1. Settlement - Rare incidence of failed trades
    2. Custody-Sufficient competition to ensure high quality custodian services
    3. Clearing & settlement - T +3 or shorter, T+7 or shorter for Frontier
    4. Stock Lending is permitted
    5. Settlement - Free delivery available
    6. Custody - Omnibus account facilities available to international investors
  4. Dealing Landscape
    1. Brokerage - Sufficient competition to ensure high quality broker services
    2. Liquidity - Sufficient broad market liquidity to support sizeable global investment
    3. Transaction costs - implicit and explicit costs to be reasonable and competitive
    4. Short sales permitted
    5. Off-exchange transactions permitted
    6. Efficient trading mechanism
    7. Transparency - market depth information / visibility and timely trade reporting process
  5. Derivatives
    1. Developed derivatives markets
  6. Size of Market
    1. Market Capitalisation
    2. Total Number of Listed Companies (as at 31st Dec 2008)

MSCI list[edit]

As of September 2014, MSCI Barra classified the following 26 countries as developed markets:[4]

S&P list[edit]

As of 31 May 2012, Standard and Poor's classified the following 26 countries as developed markets[5] (the list being identical to the FTSE list, see above):

Dow Jones list[edit]

Dow Jones classifies the following 26 countries as developed markets:[6]

South Korea will be added effective September 2014.[7]

Russell list[edit]

As of May 2013, Russell Investments considers the following countries developed markets:[8]

See also[edit]

References[edit]