Asia Index, a joint-venture between S&P Dow Jones Indices, a leading global index provider, and BSE, India’s first stock exchange, has launched the S&P BSE SENSEX 50 Index. Designed to measure the performance of the 50 largest and most liquid companies listed at BSE, the index may serve as the underlying for future investment products including exchange-traded funds.

Alka Banerjee, CEO, Asia Index Private Limited.

Alka Banerjee, CEO, Asia Index, commented: “The Indian markets have broadened and deepened with time. With the launch of the S&P BSE SENSEX 50 Index, a transparent and rule-based index, we aim to provide a more effective tool for institutional and retail investors’ growing needs.”

Approximately 54% of the total market capitalization of BSE-listed companies are covered in the new index which weights its constituents based on their float-adjusted market capitalization. The index is rebalanced semi-annually in June and December and is calculated in Indian rupees and US dollars.

According to Ashishkumar Chauhan, CEO, BSE, the index provides efficient diversification by representing each key economic sector identified by BSE’s sector model.

Using back-tested data the index is up 5.1% year-to-date, as of 30 November 2016, compared to 6.8% for the S&P BSE LargeMidCap Index. Over the past ten years, it has shown an annualized return of 8.9%, also underperforming its benchmark which returned 9.8% per annum over the same period.

Source: Asia Index Private Limited.

The weight of the largest index constituent, HDFC Bank, is 7.9% and the combined weight of the top ten constituents is 51.0%.