The MSCI Iceland Index will be included in the MSCI Frontier Markets Index in one step coinciding with the May 2021 Semi-Annual Index Review. Based on the simulation using pro forma data as of June 18, 2020, this would lead to the inclusion of two securities (MAREL IR and ARION IR) in the MSCI Frontier Market Index (excluding Kuwait) with an estimated index weight of 5.24%.
“The change is a major improvement for the Icelandic market and has, in fact, been expected for a while. Iceland’s reclassification to MSCI’s Frontier Markets supports our work marketing Iceland as an investment option for foreign investors. As a result, among other things, we will see index funds entering the Icelandic market, as many of them are bound by investment policies prohibiting them from entering investments that are not part of an international index. Iceland’s changed MSCI classification opens the doors to many foreign investment funds,” says Haraldur Þórðarson, Fossar Markets’ CEO.
In addition, MSCI announced the launch of a consultation on the potential inclusion of the MSCI Iceland Index to the MSCI Frontier Markets 100 Index and the MSCI Frontier Markets 15% Country Capped Index. The results of this consultation will be announced coinciding with the February 2021 Quarterly Index Review.
Iceland was added to the FTSE Frontier Markets composite indices effective from September 2019, after being reclassified as a Frontier Market in September 2018.