Measuring Indian Equities: The S&P BSE 500

Categories: Industry/Sector Analysis, General Market Analysis, Investment Management, Investor Education, Equity Investments

Country or region: India

Summary:
This paper discusses the construction and attributes of the S&P BSE 500 and compares it with other popular equity indices in the Indian market.


Reference URL: https://spindices.com/documents/research/research-measuring-indian-equities-the-sp-bse-500.pdf




Abstract

EXECUTIVE SUMMARY

Interest in Indian equities should continue to grow, as the International Monetary Fund (IMF) projects a growth rate of 7.4% in 2018 and 7.8% in 2019 for the Indian economy, putting it among the fastest-growing global markets of its size.

The S&P BSE 500 is designed to measure the performance of the leading 500 Indian companies, and it covers more than 88% of India’s listed equity market capitalization.

The S&P BSE 500 has historically exhibited low correlation to global markets, providing a potential diversification opportunity.

The index offers diversified exposure to all GICS® sectors. The large-cap stocks account for nearly 79% of the index weight. The combined weight of constituents having individual derivative trading is 87%, which facilitates the hedging of the index portfolio. Thus, the S&P BSE 500 reflects a complete picture of India’s economy.

Over the period studied, the S&P BSE 500 outperformed the S&P BSE 100 and S&P BSE 250 SmallCap Index, while it underperformed the S&P BSE 150 MidCap Index on an absolute and risk-adjusted basis over the long term.

The financials sector, which constituted the highest average index weight over the past three years, contributed the most (nearly onethird) of the total returns of the S&P BSE 500.



Date of original publication:

08/21/2018


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