BSE Index Services Pvt. Ltd., a wholly owned subsidiary of BSE, on Monday launched the BSE SmallCap 500 Index along with four factor-based indices derived from the same universe, expanding its suite of rules-based equity benchmarks.
The BSE SmallCap 500 Index is a combination of constituents from the BSE 250 SmallCap Index and the BSE 250 Microcap Index. The four factor indices built on this universe are the BSE SmallCap 500 Quality 50, Momentum 50, Low Volatility 50, and Enhanced Value 50 — each selecting 50 companies based on their respective factor scores.
All five indices carry a base value of 1,000, with a first value date of September 19, 2005. They are reconstituted quarterly and apply an additional screening criterion of 90% stock trading frequency.
The Quality 50 index tracks the 50 highest-scoring companies on quality parameters, while the Momentum 50 captures companies showing the strongest persistence in relative performance. The Low Volatility 50 selects the least volatile stocks in the universe, and the Enhanced Value 50 identifies companies with the most attractive valuations.
Ashutosh Singh, MD and CEO of BSE Index Services, said the new indices provide transparent and rules-based benchmarks to capture key equity factors in India’s small-cap segment, aimed at supporting product innovation for asset managers and institutional investors.
The indices are intended to serve as underlying benchmarks for passive investment products such as exchange-traded funds and index funds. They can also be used for benchmarking Portfolio Management Service strategies and mutual fund schemes.
BSE Index Services, formerly Asia Index Pvt. Ltd., calculates and maintains a broad family of indices. BSE itself is Asia’s oldest stock exchange and holds the distinction of being the world’s largest exchange by number of listed companies.