BSE Index Services Pvt. Ltd., a wholly-owned subsidiary of BSE, launched the BSE Total Market Index (TMI) on Thursday. According to the exchange, the index is designed to track the performance of companies representing 98% of the BSE AllCap Index by total market capitalisation. The index will maintain coverage of at least 98% of the BSE AllCap universe, subject to a minimum of 1,000 constituent stocks, making it one of the broadest benchmarks for the Indian equity market. As reported by BSE, the benchmark has been created to reflect the overall performance of the Indian equity market as it continues to expand.
The BSE Total Market Index has a base value of 1,000, with September 16, 2005 as its first value date. As reported by BSE, the index will be reconstituted semi-annually in June and December to ensure it continues to represent the broader market. According to Ashutosh Singh, Managing Director and CEO of BSE Index Services Pvt. Ltd., the index has been designed as a future-ready benchmark that expands in line with the growth of India's capital markets rather than being restricted to a fixed number of constituents. The index is not restricted to a fixed number of companies and will continue expanding as the listed market grows, ensuring wider and more relevant market representation over time.
The new benchmark can be used for passive investment products such as exchange-traded funds (ETFs) and index funds, besides serving as a benchmark for portfolio management services (PMS), mutual fund schemes and institutional portfolios. According to BSE, this comprehensive coverage ensures broad and relevant representation of the listed market capitalisation universe while reflecting how the market continues to evolve. The exchange believes the benchmark will support passive investing by offering investors a broader view of the Indian equity market.
This launch follows BSE Index Services' earlier introduction in January of the Derivative Stocks Index, which tracks the performance of derivative-linked constituents of the BSE 500 Index. Similar to the Total Market Index, the Derivative Stocks Index is intended to support passive investment strategies through ETFs and index funds, while also serving as a benchmark for PMS strategies, mutual fund schemes and investment portfolios. The launch is part of BSE's efforts to expand its range of market indices, with both indices designed to support professional portfolio managers and investment funds.
