The Markets October 31, 2007

Barclays Launches Inflation-Linked Emerging Market Debt Indexes

Barclays Capital, the investment banking division of Barclays Bank PLC, announced the launch of a family of local currency Emerging Market Government Inflation-Linked Bond (EMGILB) benchmark indexes.
Reported by

According to the announcement, this is the first time a full family of indexes has been available to asset managers and institutional investors looking for a representative benchmark for government inflation-linked debt within developing nations. The indexes were created by the Barclays Capital Index Products Group and approved by the independent Barclays Capital Inflation-linked Index Committee.

Individual indexes track the performance of inflation-linked bonds issued by the sovereign governments of Argentina, Brazil, Chile, Colombia, Mexico, Poland, South Korea, and Turkey. These indexes (along with the pre-existing Barclays/BESA South African Inflation-Linked Bond Index) are then used to create indexes tracking debt within Latin America, Asia, Eastern Europe, Middle East, and Africa (EEMEA), the announcement said. All of these component indexes then roll up to form the Emerging Market Government Inflation-Linked Bond benchmark index.

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Barclays Capital will also make customized indexes available and provide support and analytics for these indexes via Web based and other e-commerce protocols. The indexes are calculated daily and use standard settlements and market calendars most appropriate for international investors.

Complete index rules are available in Barclays Capital’s new Inflation-linked Emerging Markets Index Guide.

More information can be found at www.barclayscapital.com.

Products October 31, 2007

MBIA Asset Management to Launch Two Inflation Protected Funds

MBIA Asset Management plans to launch two new inflation protected, open-ended funds designed for institutional investors, pension funds, and high-net-worth individuals.
Reported by

According to a press release, the MBIA Municipal Bond Inflation Fund is set to launch in early November and the MBIA Multi-Sector Inflation Protection fund in set to launch in early 2008.

The municipal bond fund will get an initial funding of $25 million and will create a municipal bond portfolio which guards against inflation, similar to the protection provided by Treasury Inflation-Protection Securities (TIPS).

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The municipal bond fund gives investors access to municipal inflation protected securities or MIPS, which are a growing but still relatively small part of the bond market. In order to increase the available supply of MIPS, the fund will synthetically create MIPS by overlaying inflation swaps on a diversified portfolio of municipal bonds, which the company says will provide investors with higher inflation-adjusted returns and better diversification than natural MIPS.

The MBIA Multi-Sector Inflation Protection Fund is designed to provide well-diversified exposure to the commodities, TIPS and real estate sectors. Each provides a slightly different form of protection at different phases of the inflationary cycle. This fund gives the investor exposure to the three primary inflation hedging sectors.

For more information on MBIA Asset Management, visit www.mbiaam.com.

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