The Nifty200 Value 30 uses a combination of metrics to identify undervalued companies, including earnings per share (E/P), book value per share (B/P), sales per share (S/P), and dividend yield. This approach focuses on companies with strong fundamentals that may be trading at a discount compared to their true worth.
The weight of each company in the Nifty200 Value 30 Index is determined by a combination of its value score and its free-float market capitalization. This weighting methodology helps to diversify the index and prevent any single stock from having an outsized influence. Additionally, stock weights are capped at the lower of 5% or 5 times the weight of the stock in the index based only on free float market capitalization.
The Nifty200 Value 30 Index is expected to serve as a valuable benchmark for asset managers and passive investment products like Exchange Traded Funds (ETFs), index funds, and structured products. The index boasts strong historical performance with a total return (YTD) of 26.43% as of 12 June 2024. It has surged 93.41% in one year and clocked a CAGR of 28.59% in five years.
The Nifty200 Value 30 Index was launched on June 12, 2024. The index has a base date of 1 April 2005 and a base value of 1000. It will be rebalanced semi-annually and currently consists of 30 companies.
This new index provides investors with a targeted tool to invest in potentially undervalued companies within the largecap space.
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