NSE Indices launches Nifty Midcap150 Quality 50 Index

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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