The S&P Latin America Infrastructure Index is designed to measure the largest and most liquid publicly-listed Latin American infrastructure companies that meet certain investability requirements. The launch of the S&P Latin America Infrastructure Index follows the introduction of the S&P MILA 40 earlier in the month. Together, S&P Indices says these are “providing investors in Latin America with a means of measuring the performance of leading companies in the region.”
Using companies’ business descriptions and “cluster” Global Industry Classification Standard (GICS) classification techniques, the S&P Latin America Infrastructure Index methodology identifies constituents belonging to the Energy, Transportation, Telecommunications, and Utilities clusters. It uses a modified market capitalization weighting scheme with constituent weights determined by size and no single constituent can have a weight of more than 8% in the Index.
As of August 31, 2011, the top five companies by weight in the S&P Latin America Infrastructure Index represent 37.4% of the Index. The companies are:
- America Movil SAB de CV L ADR (Telecommunications, Mexico),
- Lan Airlines S.A. ADR (Transportation, Chile)
- Empresa Nacional de Electricidad SA (Utilities, Chile)
- CPFL Energia SA ADR (Utilities, Brazil)
- Enersis SA ADR (Utilities, Chile).
Simultaneously, S&P Indices is offering risk control versions of the S&P Latin America Infrastructure Index, which the firm says allows investors to limit volatility by replacing equities with a cash component if volatility exceeds a specified level. The risk control versions will be for 10%, 12% 15%, and 18% volatility levels.