Football fanatics across the globe are watching closely to see which of the 32 countries that qualified for the FIFA World Cup finals in Qatar will raise the trophy in glory.
Every four years, the global spotlight scrutinizes each nation’s footballing prowess (or lack thereof). Beyond coaches, pundits and tacticians, the World Cup gives plenty of fodder for social scientists, economists and even political theorists to analyze and attempt to identify trends or patterns that may contribute to World Cup success.
If tournament success were down to population size, China and India would have surely won the cup by now. If the economy size or GDP per capita were a meaningful metric, then the U.S., Luxembourg or Singapore would surely have come close to winning the coveted cup by now. The countries topping the UN’s Human Development Index (Switzerland, Norway and Iceland) haven’t won a World Cup either. In fact, a number of these notable mentions rarely qualify for the finals.
S&P Dow Jones Indices (S&P DJI) certainly does not purport to have isolated the secret ingredient for World Cup success, but we do know indices and are keenly following competing countries that are included in the S&P Global BMI (Broad Market Index) and S&P Frontier BMI.
S&P DJI Market Classifications
The S&P Global BMI consists of 49 markets, of which 25 are classified as developed and 24 as emerging, while the S&P Frontier BMI consists of 31 additional markets. The S&P Global BMI comprises over 14,000 companies and covers all publicly listed equities with float-adjusted market values above USD 100 million that meet minimum liquidity criteria. The S&P Frontier BMI is designed to measure the performance of relatively smaller and less liquid markets.
Of the 32 countries that have qualified for the 2022 World Cup finals, 20 are included in the S&P Global BMI, covering 87.7% of the index’s market capitalization; 15 of these are considered developed, while the other 5 are emerging. Seven other competing countries are represented within the S&P Frontier BMI, covering just over a third of the index’s market capitalization, while the remaining five qualifiers do not currently meet frontier market criteria.
Developed Markets Have Better FIFA Rankings
Looking at the average FIFA ranking of each segment, the developed cohort has the lowest at 15.8, followed by the countries not classified in S&P DJI’s global equity index series at 25.8. Despite having the top-ranked nation (Brazil), the emerging cohort’s average rank is 28.2, which is higher than the frontier cohort at 27.1.
Developed Markets Overrepresented at the World Cup Finals
FIFA membership consists of over 200 nations and associations, and only 25 of those are classified as developed markets by S&P DJI. However, these nations1 represent over 40% of the countries (15 of 32) that qualified for the 2022 finals and over 60% of the teams that progressed to the round of 16.
Since the S&P Global BMI launched in 1989, there have been eight World Cup finals, two have been won by an emerging market—Brazil—and the other six by countries classified as developed markets—Germany, France, Italy and Spain.
While Brazil is the favorite to be in the World Cup Final on Dec. 18, 2022, form aside, it seems that countries from the developed markets cohort will have the highest likelihood of World Cup success. While the frontier cohort has bucked the trend outperforming emerging.
Notable Outperformers and Underperformers
Given each country’s stature in the S&P Global BMI by composition weight and number of companies, Canada, Germany and Denmark would be seen as underperformers in terms of global market stature and footballing prowess by not progressing beyond the group stage at this year’s World Cup.
While Argentina, Brazil and Croatia have outperformed their market stature, they are highly placed in their FIFA rankings—so this isn’t unexpected. Surprising outperformers would be Morocco, Ghana and Senegal based on their limited investable market stature.
S&P Dow Jones Indices Market Classification Methodology can be found here: https://www.spglobal.com/spdji/en/documents/index-policies/methodology-country-classification.pdf.
1 The U.K. is classified as one developed market but represented in multiples associations within FIFA—England, Northern Ireland, Gibraltar, Scotland and Wales.
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