JPMorgan will reclassify Kuwait and Qatar as developed markets and will soon begin their phased removal from its Emerging Markets Bond Index, from which the United Arab Emirates might also be removed next year.

The US-headquartered lender's EMBI tracks the performance of emerging market bonds — debt issued by countries with developing economies. These bonds typically carry higher risk but offer investors higher returns. The EMBI is closely followed by investors worldwide.

In a report released Thursday, JPMorgan’s Global Index Research team said that Kuwait and Qatar will be removed from the EMBI in phases spanning a six-month period starting from March 31. The bank said that new bond issuances from these countries will no longer be included in the index.

The change will affect two bonds........

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