Bank of America Merrill Lynch (BAML) Global Research has launched a new family of emerging markets corporate bond indices denominated in US dollars and euros, to track the performance of emerging markets corporate and quasi-government debt.

The series comprises two flagship benchmarks including the BofA ML Emerging Markets Corporate Plus Index (EMCB), a broad, capitalisation-weighted composite index designed to track the performance of debt of corporate issuers who primarily do business in emerging market countries; and the BofA ML US Emerging Markets Liquid Corporate Plus Index (EMCL), which is a subset of the Emerging Markets Corporate Plus Index containing only US dollar-denominated bonds that meet higher minimum size requirements than those required for inclusion in the broad index. It also limits exposure to individual countries and issuers.

Head of global emerging markets corporate credit research BAML, Anne Milne, said that traditional high-grade and high-yield investors are using emerging markets corporate bonds to enhance the yield of their portfolios and achieve better diversification.

"Emerging market corporates have become a significant component of portfolio strategy because of their growing size, historically attractive risk-adjusted returns and portfolio diversification benefits," she said. "As sovereign debt declines in importance, traditional emerging markets investors are replacing it, at least in part, with corporate debt."

Both indices include segments of the market not previously tracked in a single index including quasi-government debt, EUR-denominated bonds and bonds that meet less restrictive maturity and size requirements (in the EMCB index). As a result, the EMCB currently tracks 47 countries while the EMCL index tracks 37 countries, providing the most extensive coverage of this rapidly growing market, 72% of which is rated investment grade.

The EMCB index includes 875 bonds with exposure to 47 countries having a total market capitalisation of $601.2bn and is complemented by 16 sub-indices that segment the market by currency, rating, region and sector; while the EMCL index includes 537 bonds with exposure to 36 countries having a total market capitalisation of $460.4bn. The index is complemented by 14 sub-indices that segment the market by rating, region and sector.

The Emerging Markets Corporate Indices are compiled daily.