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BSE Launches Long-Short & Inverse Indices for Hedged Market Strategies

BSE Index Services has launched new Long-Short and Inverse Indices. The indices include combinations like BSE 500 Long + 200 1X Inverse with an 80:20 allocation. They are designed to reflect systematic hedged strategies, combining broad market exposure with mechanisms to manage risk. These tools aim to support asset managers in creating more resilient investment products.

Key Points: BSE Launches Long-Short and Inverse Indices

  • New indices for hedged strategies
  • Tracks inverse returns of benchmarks
  • Uses 80:20 long-short allocation
  • Aims to manage downside risk
2 min read

BSE Index Services launches Long-Short and Inverse Indices to reflect hedged market strategies

BSE Index Services introduces new Long-Short and Inverse Indices to enable hedged strategies and manage downside risk for investors.

"We are pleased to introduce... a differentiated addition to our index offering that reflects the evolving needs of market participants. - Ashutosh Singh"

Mumbai, March 18

BSE Index Services, a wholly owned subsidiary of BSE, today announced the launch of BSE Long-Short Indices and BSE Inverse Indices. The two Inverse indices track the inverse returns of the underlying indices, while the two LongShort indices combine long market exposure in BSE 500 and 1X inverse positions in BSE 150 Midcap and BSE 200, respectively, to reflect hedged market strategies, according to a press statement released by BSE Index Services today.

The indices launched today include BSE 500 Long + 200 1X Inverse 80:20. This index measures the performance of a composite index composed of the BSE 500 and BSE 200 1X Inverse Daily, with weights assigned to the two underlying indices of 80% and 20%, respectively.

The other index launched today was BSE 500 Long + 150 MidCap 1X Inverse 80:20. It measures the performance of a composite index composed of the BSE 500 and BSE 150 MidCap 1X Inverse Daily, with weights assigned to the two underlying indices of 80% and 20%, respectively.

BSE 150 MidCap 1X Inverse Daily is the third index launched today. This Index provides inverse returns of the BSE 150 Midcap Total Return Index.

Another index launched is the BSE 200 1X Inverse Daily, which provides inverse returns of the BSE 200 Total Return Index.

Ashutosh Singh, MD & CEO of BSE Index Services Pvt. Ltd., highlighted the significance of these indices, stating, "We are pleased to introduce the BSE Long-Short Indices & BSE Inverse Indices, a differentiated addition to our index offering that reflects the evolving needs of market participants."

"The 80:20 long-short indices have been specifically constructed to reflect systematic long-short strategies through an 80:20 allocation framework, and the BSE 200 & BSE 150 MidCap 1X Inverse Indices provides exposure to diversified benchmarks with 1X inverse positioning. This framework aims to provide a balanced approach to market participation by combining broad-based long exposure to BSE 500 with a systematic mechanism for managing downside risks in the equity segment through selective short positions. As markets become increasingly dynamic, such rule-based strategies aim to support more resilient and innovative product offerings by Asset Managers," he further added.

These new indices can be used for benchmarking Specialised Investment Funds (SIFs) strategies and other relevant long-short strategies by asset managers. Investors can now access a broader spectrum of market opportunities, further enriching their investment strategies with this latest addition to BSE's suite of indices.

- ANI

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Reader Comments

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Priya S
Sounds very complex for the average investor like me. I just want simple SIPs in good mutual funds. All this inverse, long-short... feels like it's more for HNIs and institutions. Will regular people even understand how to use these?
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Rohit P
Great innovation! Indian markets are maturing. This gives fund managers proper tools to create products that can protect capital during downturns. The BSE 500 long + inverse midcap is particularly interesting for managing sector-specific risks. Jio and democratization of data, now BSE and democratization of advanced strategies! 💹
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Sarah B
While the intent is good, I hope there is massive investor education around these. Inverse indices can be risky if held for the wrong duration. People might see "inverse" and think it's a sure-shot way to make money when markets fall, without understanding the daily reset mechanism. SEBI should ensure clear warnings.
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Karthik V
As someone who works in finance, this is a significant step. It brings India on par with global exchanges offering such strategy indices. The 80:20 allocation is a classic risk-parity approach. Now, waiting for the derivatives and structured products to be built on top of this. Well done, BSE!
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Meera T
More indices, more confusion. We already have so many - Nifty, Sensex, Bank Nifty, what not. I appreciate innovation, but I hope the focus remains on making existing markets safer and more transparent for small investors. This feels like a product for the 1%.

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