S&P Dow Jones Indices, in partnership with Sao Paulo-headquartered financial market infrastructure company B3, has launched the S&P/BOVESPA Non-State Owned Enterprises Index, representing the most liquid stocks trading on the Brazilian Stock Exchange that are not controlled, directly or indirectly, by public entities, municipalities or states of the Federal District.

Brazil’s benchmark Bovespa Index is up 23.2% over the year to 20 June 2017.

“The launch of the S&P/BOVESPA Non-State Owned Enterprises Index is part of our strategy to develop markets and to broaden the portfolio of products that are important points of reference for investors,” said Claudio Jacob, B3’s client and business development and international relations managing director,

Index constituents must be listed for a minimum of three months, have traded at least 95% of trading days and have a minimum average daily value traded (MDVT) of 10 million Brazilian reals for this time period. The index, which is reconstituted and rebalanced annually in September, currently has 70 constituents.

“The S&P/BOVESPA Non-State Owned Enterprises Index is designed to provide global market participants the opportunity to access the Brazilian market using an innovative perspective,” said Silvia Kitchener, product manager at S&P Dow Jones Indices. “For the first time, the marketplace is able to measure the independently-operated and publicly-traded companies at the forefront of Brazil’s economy.”

Using back-tested data, the index is up 20.3% over the past year which is below the return of 23.2% for the broader Bovespa Index (Data as of 20 June 2017). The Bovespa stock index and Brazil’s currency, the real, were the best performers in emerging markets last year as investors bought back into the country ahead of planned structural market reforms announced by acting president Michel Temer.

The index may be licensed to asset managers looking to create new investment products, including ETFs, targeting the returns to Brazilian equities.