BSE Index Services Introduces New SmallCap 500 and Factor Indices

Original: BSE Index Services launches BSE SmallCap 500-based market cap and factor indices

The Economic Times•Mar 9, 20262 min

In a Nutshell

BSE Index Services has launched the BSE SmallCap 500 Index along with four new factor indices, enhancing investment options in India's small-cap segment. These indices, which include Quality, Momentum, Low Volatility, and Enhanced Value strategies, aim to provide efficient tools for asset managers and institutional investors.

Key Points

01Launch of the BSE SmallCap 500 Index and four factor indices.
02Indices are designed for passive investment strategies like ETFs and Index Funds.
03New indices target specific investment factors: Quality, Momentum, Low Volatility, and Value.
04Indices are reconstituted quarterly with a base value of 1,000.
05They provide benchmarks for portfolio management and mutual fund schemes.

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Full Summary

BSE Index Services, a subsidiary of the Bombay Stock Exchange (BSE), has launched the BSE SmallCap 500 Index along with four factor indices: Quality 50, Momentum 50, Low Volatility 50, and Enhanced Value 50. These indices are based on the BSE SmallCap 500 Index universe and are reconstituted quarterly, starting with a base value of 1,000 from September 19, 2005. Ashutosh Singh, Managing Director and CEO of BSE Index Services, emphasized that these indices provide transparent, rules-based benchmarks that capture key equity factors in India’s small-cap segment. They are designed to support product innovation and offer asset managers efficient tools for accessing differentiated small-cap factor exposures. The new indices can be utilized for passive investment strategies such as Exchange-Traded Funds (ETFs) and Index Funds, as well as for benchmarking Portfolio Management Services (PMS) and mutual fund schemes. This launch significantly enhances investment opportunities for investors in the small-cap market.

Key Figures

1,000

Base value of the new indices

September 19, 2005

First value date of the indices

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Why It Matters

The introduction of these indices provides investors with more diverse options for small-cap investments, potentially leading to better portfolio performance and risk management.

Who is affected

Asset managers, institutional investors, and individual investors looking to diversify their portfolios.

What to know

Investors should consider integrating these new indices into their investment strategies for enhanced exposure to small-cap stocks.

FAQ

The BSE SmallCap 500 Index aims to provide a benchmark for small-cap investments, allowing investors to track the performance of smaller companies in India.

Investors can use the new factor indices for passive strategies such as ETFs and Index Funds, as well as for benchmarking various investment portfolios.

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