India Index Services & Products Limited (IISL), an NSE group company, today launched a series of six corporate bond indices to capture the risk-return dynamics of 'AAA' rated debt securities.
'The Nifty AAA' corporate bond index series comprises of five indices across different maturities and one composite index.
Corporate bonds assigned with 'AAA' ratings are considered to be of high credit quality with the lowest risk of default.
"The indices are expected to act as benchmarks for asset managers looking for an effective metric that measures the risk-return dynamics of the corporate bond market," IISL said in a statement.
"The indices are also expected to be reference indices to be tracked by passive funds in the form of exchange traded funds (ETFs), index funds and structured products," it added.
The five indicies with maturities are -- Nifty AAA ultra short-term corporate bond index with maturity of 0.5 to 2 years, Nifty AAA short-term corporate bond index with maturity of 2 to 3 year, Nifty AAA medium-term corporate bond index 3 to 5 Years, Nifty AAA long-term corporate bond index (5 to 10 years) and Nifty AAA ultra long-term corporate bond index with above 10 years maturity.
The composite index 'Nifty AAA corporate bond index' represents all maturities.
"The index construction methodology pays specific attention to maintaining high portfolio liquidity, lower portfolio turnover and better market coverage," IISL CEO Mukesh Agarwal said.
"Given the illiquid nature of the Indian corporate bond market, this unique mix of index attributes is expected to make them the most suitable benchmark indices," he added.
The base date for all the indices has been set as December 31, 2013 and base value is 1,000.
The index would be calculated on an end-of-day basis and would be reviewed on a quarterly basis.
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