NSE group firm India Index Services & Products Limited (IISL) today launched 'NIFTY50 Equal Weight Index', an alternative weighting strategy to market capitalisation based parent index -- the NIFTY 50.
"NIFTY50 Equal Weight Index is a smart yet simple index strategy - which allocates equal weight to all companies in the index, instead of considering their economies or market capitalisation as the sole criteria for weight allocation," IISL CEO Mukesh Agarwal said in a statement.
The new index is expected to act as a benchmark for asset managers looking for an alternative weighting strategy to its market capitalisation weighted parent index, NIFTY 50, for launching products.
The NIFTY50 Equal Weight Index would be calculated on an end-of-day basis.
The base date for the index is November 3, 1995 and base value is 1,000.
The index composition will be reconstituted semi-annually along with NIFTY 50, however the weights of companies in the equal weight index will be rebalanced on a quarterly basis.
"The weights may, however, drift between rebalancing due to movement in stock price," the statement said.
IISL, owns and manages a number indices under NIFTY brand including NIFTY 50. NIFTY indices are used as benchmarks for products traded on NSE.
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