Asset managers are starting a big restructuring of their emerging market funds after changes in the leading indices for the sector. Standard & Poor's and MSCI, which dominate the emerging market index sector, have responded to calls from investors for a more 'investable' universe by altering the way they calculate which countries and companies qualify for inclusion.

The consequences for stocks, sectors and countries in the sector will be far-reaching. Some of the smallest countries, including Jordan, Sri Lanka, Zimbabwe, Colombia and Slovakia are expected to fall out of the S&P/IFC emerging markets investables index later this year. With Greece and Portugal moving up to developed market status, countries such as South Africa, South Korea and Mexico will make up a larger portion of both the MSCI and S&P/IFC emerging markets investable indices. Egypt and Morocco will also benefit from joining the MSCI.