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NSE Indices launches Nifty Smallcap250 Momentum Quality 100 index

Published on Dec 22, 2023 11:00

NSE Indices, a subsidiary of NSE, has introduced a new strategy index called the Nifty Smallcap250 Momentum Quality 100 index. This index will monitor the performance of 100 small-cap stocks chosen based on a combination of their momentum and quality factor scores.

The momentum score is determined by the 6-month and 12-month price return, adjusted for volatility, while the quality score is based on return on equity, financial leverage, and earnings growth variability over the past 5 years.

The index`s stock weight is calculated using a combination of composite momentum-quality score and free-float market capitalization, with stock weights capped at 3% during index rebalancing.

With a base date of 1 April 2005, and a base value of 1000, the index will undergo reconstitution and rebalancing semi-annually. This new index is expected to serve as a benchmark for asset managers and be tracked by passive funds such as Exchange Traded Funds (ETFs), index funds, and structured products.

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