NSE group firm India Index Services & Products Ltd (IISL) today launched a series of six corporate bond indices across different maturities for the Indian bond markets.
The move is aimed at measuring the risk-return dynamics of the corporate bond market.
The Nifty AAA corporate bond index series comprises five indices and one composite index.
Five of these indices represent performance of liquid corporate bonds while the sixth one will be the composite one covering them all.
These indices are: Nifty AAA ultra short-term corporate bond, Nifty AAA short-term corporate bond, Nifty AAA medium-term corporate bond, Nifty AAA long-term corporate bond, Nifty AAA ultra long-term corporate bond and Nifty AAA corporate bond index. They will have maturity period ranging from six months to 10 years.
"The index construction methodology pays specific attention to maintaining high portfolio liquidity, lower portfolio turnover and better market coverage.
"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," IISL Chief Executive Officer Mukesh Agarwal said in a statement.
The base date for all the indices is December 31, 2013 and base value is 1000. The indices, which will be calculated on an end-of-day basis, 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.
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.
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