Perhaps encouraged by the growing consumption portfolio theme among equity investors, the National Stock Exchange (NSE) is launching the CNX Consumption Index from Tuesday. Besides, two more indices CNX Metal Index and CNX Auto Index would be made available, which are already being offered by the Bombay Stock Exchange (BSE).
As per NSE data, CNX Consumption index has outperformed the broader market returns over one as well as three years. In the last one year, while CNX Consumption Index generated a return of 7.73%, it was 4.98% for both Nifty and Sensex. Over a three year horizon, the CNX Consumption Index managed to give a return of 45.31% as against 38.99% and 38.70% return for Sensex and Nifty, respectively.
The CNX Consumption Index comprises 30 companies listed on the NSE representing sectors such as consumer non-durables, healthcare, auto, telecom services, pharmaceuticals, hotels, media & entertainment among others. These companies usually are known to benefit from the increased consumption of domestic people, aided by increased wealth and income levels. The companies with highest weightage in the index include ITC, Bharti Airtel, Hindustan Unilever, Mahindra & Mahindra, Tata Power, Bajaj Auto, Sun Pharma and Maruti Suzuki among others.
The index has been developed jointly by India Index Services and Products, a joint venture of NSE and Crisil.