National Stock Exchange’s (NSE) index services arm, India Index Services & Products Limited (IISL), on Friday launched 75 new indices for the Indian fixed income and hybrid portfolios. The NIFTY Fixed Income Index series comprises 72 indices to track fixed income assets, including government securities, T-bills, corporate bonds of different credit ratings, commercial papers, certificates of deposit and the overnight rate. IISL also launched three hybrid indices, Nifty50 Hybrid Composite Debt 70:30 Index (70 equity to 30 debt), Nifty50 Hybrid Composite Debt 50:50 Index and Nifty50 Hybrid Composite Debt 15:85 Index. All new NIFTY fixed income and hybrid indices are total return indices. Total return indices in addition to capturing the change in daily prices also account for the yield earned by index constituents. The market regulator, Securities & Exchange Board Of India had recently asked mutual funds to move to benchmarking their performance against total returns.
“These indices will be crucial in deepening of fixed income markets in India by helping market participants in accurately measuring and efficiently managing risks and returns in fixed income investments,” said Vikram Limaye, MD & CEO, NSE. Limaye added that he is confident the new debt indices on the exchange will help in the growth of debt ETFs (Exchange Traded Funds). “The announcement by the finance minister in the recent budget on launch bond ETFs is also a step in this direction. We are closely involved with the ministry of finance on the issue. This is another product which is very useful for the public,” Limaye said.
Mukesh Agarwal, CEO, IISL said: “With well-defined, rules-based market-relevant construction approach and long back-tested history of more than 16 years, the newly launched fixed income and hybrid index series will strongly appeal to the investment community in the fixed income and hybrid space.” The indices are expected to act as benchmarks for asset managers, and would help to accurately measure and efficiently manage risks and returns on fixed income investments.