BSE launches Total Market Index covering 98 pc of 'AllCap' index market cap
Mumbai, July 23
BSE Index Services Pvt. Ltd. -- a wholly-owned subsidiary of BSE -- on Thursday launched the BSE Total Market Index, a new benchmark designed to track the performance of companies representing 98 per cent of the BSE AllCap Index by total market capitalisation.
According to the exchange, the index will maintain coverage of at least 98 per cent of the BSE AllCap universe, subject to a minimum of 1,000 constituent stocks, making it one of the broadest benchmarks for the Indian equity market.
The BSE Total Market Index has a base value of 1,000, with September 16, 2005, as its first value date. The index will be reconstituted semi-annually in June and December.
Ashutosh Singh, Managing Director and CEO of BSE Index Services Pvt. Ltd., said the index has been designed as a future-ready benchmark that expands in line with the growth of India's capital markets rather than being restricted to a fixed number of constituents.
"The BSE Total Market Index is designed to grow as India's capital market grows, ensuring broad and relevant representation of the listed market capitalisation universe while reflecting how the market continues to evolve," he said.
The exchange said the new benchmark can be used for passive investment products such as exchange-traded funds (ETFs) and index funds, besides serving as a benchmark for portfolio management services (PMS), mutual fund schemes and institutional portfolios.
Earlier in January, BSE Index Services had launched the Derivative Stocks Index, which tracks the performance of derivative-linked constituents of the BSE 500 Index. Similar to the Total Market Index, it is intended to support passive investment strategies through ETFs and index funds, while also serving as a benchmark for PMS strategies, mutual fund schemes and investment portfolios.
— IANS
Reader Comments
Smart move by BSE. With over 1,000 stocks, it's essentially the entire market. This could be great for passive investors looking for broad exposure without picking individual stocks. 98% coverage is massive. Looking forward to seeing the first ETFs launched on this.
Good concept, but my concern is about liquidity of smaller constituents. If an ETF tries to track this index, it will have to buy tiny companies which may be illiquid. That could lead to tracking errors and higher costs for investors. Hope they've thought this through. 🧐
This is exactly what India's capital market needed - a truly broad-based index that grows with the market, not constrained by a fixed number of stocks. Unlike Nifty 50 which only covers large caps, this captures the entire ecosystem including mid and small caps. Chalo, passive investing ka naya zamaana aa gaya! 🇮🇳📈
Interesting timing with the market at all-time highs. BSE clearly wants to capture more passive investment flows. The semi-annual rebalancing in June and December makes sense for institutional investors. Let's see if global investors use this as a benchmark for Indian allocations.
Bas ab ispe bhi koi bank wala ELSS scheme launch karega with 2% expense ratio! 😂 On a serious note, this could be revolutionary for small investors wanting to bet on India's entire growth story. But SEBI should ensure expense ratios remain low for index funds tracking this.
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