NSE Indices
launches Nifty Midcap150 Quality 50 Index
Index tracks
performance of select mid cap companies selected based on profitability,
leverage and earnings growth variability
NSE’s index subsidiary,
NSE Indices limited, has launched a quality-factor based smart-beta
mid-cap index namely, Nifty Midcap150 Quality 50.
The
Nifty Midcap150 Quality 50 index includes top 50 companies from its parent
Nifty Midcap 150 index, selected based on their ‘quality’ scores.
The quality score for each company is determined based on return on equity,
financial leverage (except for financial services companies) and earning per
share (EPS) growth variability of each stock analysed during the previous 5
financial years. The weight of each stock in the index is based on a
combination of stock’s quality score and its free float market
capitalization.
The
base date for the index is April 01, 2005 and base value is 1000. The index
composition is reconstituted on a semi-annual basis.
“Globally,
popularity of smart beta indices is picking up with assets under management of
Exchange Traded Funds (ETFs) and Exchange Traded Products (ETPs) tracking such
indices steadily increasing at a rate of more than 20 percent per annum during
the past 5 years to reach ~$756 bn. as on June 30, 2019 (Source: ETFGI). In
India, with availability of various smart beta indices, ETFs based on such
indices are also expected to pick up. The launch of Nifty Midcap150 Quality 50
index, along with the existing suite of Nifty smart beta indices reinforces
NSE’s commitment towards developing the passive fund management
space.” said Mukesh Agarwal, CEO, NSE Indices Limited.
The
Nifty Midcap150 Quality 50 index will be calculated on an end-of-day basis. The
index is expected to act as a benchmark for asset managers looking for a
reliable metric that measures risk-return dynamics of quality-factor based
mid-cap portfolios. The index is also expected to be reference index tracked by
passive funds in the form of Exchange Traded Funds (ETFs) or index funds and by
structured products.
For
more information on index methodology and factsheet, please visit us at www.niftyindices.com
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