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BSE's Asia Index Launches Four Smart Beta Indices for Targeted Factor Investing

The new indices, based on the BSE 500 universe, provide rule-based exposure to value, low volatility, momentum, and quality factors, with plans for further expansion in FY26.

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Overview

  • Asia Index, a subsidiary of BSE, introduced four new factor-based indices: Enhanced Value, Low Volatility, Momentum, and Quality, derived from the BSE 500 universe.
  • The indices employ a transparent, rules-based methodology with quarterly reconstitution to ensure data-driven factor signals remain current.
  • Each index has a base value of 1000 (set as of June 20, 2005), with constituents screened for liquidity and capped at 4%.
  • Factor-based investing in India has seen rapid growth, with assets under management rising from ₹100 crore to ₹40,000 crore over the past five to six years, driven by millennial and Gen Z investors.
  • The new indices will support ETFs, index funds, and serve as benchmarks for PMS strategies, mutual funds, and other portfolios, with plans to launch approximately 40 more indices in FY26.