NSE's index services subsidiary NSE Indices Ltd has launched a new index called Nifty 500 multicap 50:25:25, which aims to measure the performance of portfolio comprising large-cap, mid-cap and small-cap compes with target weights assigned to each market-cap segment (large-cap, mid-cap and small-cap).
The Nifty 500 multicap 50:25:25 index includes all compes that are part of Nifty 500 index.
While in Nifty 500 index, the total weight of each segment is based on the total free float market capitalisation of all stocks falling within that segment, in Nifty 500 multicap 50:25:25 index, the total weight of each of these three segments is fixed at 50 per cent, 25 per cent and 25 per cent respectively at every quarterly rebalance date.
The weight of 50 per cent, 25 per cent and 25 per cent for the three segments are further divided amongst stocks within the respective segment based on underlying stock's free float market capitalisation.
The weight of each segment may be different from its respective capped level between two rebalance dates due to price drift of underlying stocks.
The Nifty 500 multicap 50:25:25 index is suitable for the benchmarking of multi cap funds and will also appeal to investors seeking targeted exposure to large, mid and small market-cap segments of the Nifty 500 Index.
The base date for the index is April 1, 2005 and base value is 1,000. The index composition is reconstituted on a semi-annual basis and weights are rebalanced on a quarterly basis.
The index will be calculated on an end-of-day basis. It is expected to act as a benchmark for asset managers and be a reference index tracked by passive funds in the form of exchange traded funds (ETFs), index funds and structured products.
( With inputs from ANI )
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