Asia Index, a joint venture between S&P Dow Jones and BSE (formerly Bombay Stock Exchange), has launched the S&P BSE SENSEX Next 50 Index, designed to track the performance of the 50 largest companies not already included in the SENSEX 50 Index. The index has been designed to serve as the basis for future investment products including exchange-traded funds.
Alka Banerjee, CEO, Asia Index Private Limited.
Alka Banerjee, CEO, Asia Index, said: “The S&P BSE SENSEX Next 50 Index is an extension of the S&P BSE SENSEX 50 Index. Given the ever increasing demand from institutional and retail investors, we have launched this objective, rules-based and transparent index that is suitable to underlie ETFs or Index Funds.”
The index includes the 50 largest companies listed on the BSE but not already included in the S&P BSE SENSEX 50 index. Constituents of the index are weighted by float-adjusted market capitalization. The index goes under periodic review semi-annually in June and December.
By following the 51st to 100th largest stocks listed on the BSE, the index is targeting an approximate mid-cap exposure of the Indian equities market. Indeed the mean and median market capitalizations of the index’s constituents are 32,012 Indian crores (approximately $4.8bn) and 29,182 Indian crores (approximately $4.2bn).
The top ten constituents account for a third of the total index market capitalization.
Using backtested data as of the end of February 2017, the index is up 14.0% year-to-date, 47.5% over the past year and has returned 14.9% per annum over the past ten years.
Source: Asia Index.
“We have always endeavoured to provide investors the appropriate set of tools to make the most of the Indian equity market. Aligned to investor appetite of measuring market movements in a diversified manner, we are excited to announce the launch of this global standard index”, said Ashishkumar Chauhan, MD & CEO, BSE.
The index is calculated in INR and USD with both price return and total return versions.
Neither the Sensex 50 nor the Sensex Next 50 indices are currently tracked by ETFs, although exposure to Indian equities can be gained using ETFs from Deutsche Bank, Lyxor, Amundi, and ZyFin. The largest is the Lyxor MSCI India UCITS ETF (Euronext: INR) which has AUM of €1.3 billion and a total expense ratio (TER) of 0.85%.
The LAM ZyFin MSCI India UCITS ETF (LON: INDM) is the only physically-replicating Indian equity ETF listed in Europe. The fund has AUM of $2m and a TER of 0.89%.