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Key Takeaways
- The S&P Global Broad Market Index (BMI) is a capitalization-weighted index from S&P that reflects global equity market performance.
- The index spans over 50 countries and includes around 11,000 companies, capturing both developed and emerging markets.
- It serves as a comprehensive measure for investors looking to gauge the performance of global stock markets, including U.S. equities.
- The S&P Global BMI can aid in broad portfolio diversification due to its extensive market coverage.
- Understanding this index helps in analyzing global market trends and making informed investment decisions.
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What Is the S&P Global Broad Market Index (BMI)?
S&P Global Broad Market Index (BMI) is a market capitalization-weighted index maintained by Standard and Poor’s (S&P). It provides a broad measure of global equities markets. The index includes approximately 11,000 companies in more than 50 countries covering both developed and emerging markets, including U.S. stocks. The index encompasses both the S&P Developed BMI and the S&P Emerging BMI.
The S&P Global Broad Market Inde is sometimes simply referred to as the “BMI” but should not be confused with the Bitcoin Misery Index (BMI).
How the S&P Global Broad Market Index (BMI) Works
S&P Global Broad Market Index (BMI) is a broad-based index of global equities maintained by Standard and Poor’s (S&P). The index contains “all publicly listed equities with float-adjusted market values of U.S. $ 100 million or more” that also meet a set of minimum median daily trading rules, currently that it has a minimum of U.S. $50 million value traded over the past 12 months.
The index was launched on December 31, 1992, with its first value date on December 29, 1994. It is a weighted fund, by float-adjusted market capitalization and is rebalanced every September with IPO updates and share changes in March, June, and December. More than half the constituent companies are from the United States, with the next largest number of constituent companies from Japan.
A country will be eligible for inclusion in the index if it has a float-adjusted market capitalization of U.S. $1 billion or more and its market capitalization weight is at least 40 basis points in either the emerging market or developed world indexes.
Eligibility Requirements for the S&P Global Broad Market Index (BMI)
In addition to the financial eligibility criteria, the S&P Dow Jones Indices determine which countries are eligible or ineligible for inclusion in the fund.
The company eligibility criteria of market capitalization of U.S. $100 million or more and liquidity of a 12-month median value traded ratio (MVTR) along with a 6-month MVTR, which are different for companies from emerging countries and developed countries, also applies to IPOs, which can be added every quarter.
IPOs may be added after they have three months of trading data, and trading value is annualized to determine if the volume renders them eligible for inclusion in the fund. All publicly-traded share classes may be included, with each share class float-adjusted.
The following types of securities are not eligible for the fund: fixed-dividend shares, investment trusts, unit trusts, mutual fund shares, business development companies, closed-end funds, convertible bonds, equity warrants, Limited Partnerships, and preferred stock that provides a guaranteed fixed return.
