Asia Index Private Ltd, a company wholly owned by BSE, shook things up in India’s investment scene by unveiling four new factor-based indices on Tuesday. The BSE 500 Enhanced Value 50, BSE 500 Low Volatility 50, BSE 500 Momentum 50, and BSE 500 Quality 50 are the latest additions to their lineup, all sourced from the BSE 500 universe. These indices kicked off with a base value of 1000 on June 20, 2005, setting the stage for a new era of smart beta investing in the country.
Smart beta indices are the name of the game, according to Ashutosh Singh, the MD and CEO of Asia Index Pvt. Ltd. He expressed his excitement about the expansion of their smart beta offerings, emphasizing the switch to a quarterly reconstitution schedule for the factor indices. This new approach allows the indices to incorporate the most up-to-date financial and stock price data, giving investors a leg up in their decision-making process.
Quarterly reconstitution is a significant departure from the usual six-month rebalancing schedule seen in India’s index market. Singh explained that this change helps spread out trading activity more evenly throughout the year, streamlining portfolio management. By avoiding the headache of having to churn through 80-90% of the portfolio in one go, the new schedule aims to make life easier for dealers and fund managers alike. Not really sure why this matters, but hey, anything to make the job less of a headache, right?