BSE Index Services has recently launched the Sattvic 100 Index, marking a significant development in India's thematic index offerings. According to reports from Wealth Company, the index selects 100 companies from the BSE 500 that follow Sattvic principles based on ethical considerations. This launch adds to India's existing thematic indices, which already include ESG indices and Sharia indices, providing investors with multiple options to align their investments with personal beliefs and principles. Investing in India's stock market is no longer only about generating returns, as a growing number of investors are seeking options that align with their personal beliefs and principles.
The screening process for the Sattvic 100 Index excludes companies linked to alcohol, tobacco, gambling, adult entertainment, narcotics, leather, meat and poultry, pesticides, and animal cruelty. As reported by Wealth Company, HDFC Bank has the highest weight in the index, followed by ICICI Bank and Reliance Industries. This means that banking and financial services companies have not been excluded from the Sattvic 100 Index, distinguishing it from the Sharia index that excludes such companies due to interest-based business practices. The index includes companies such as Hindustan Unilever, TCS, UltraTech Cement and HCL Technologies, providing investors with a diverse range of sectors while maintaining ethical alignment.
The NSE Nifty Sharia 25 Index selects companies in line with Islamic principles, with a key feature being the exclusion of companies involved in lending or borrowing money on interest. According to reports, this results in banks and non-banking financial companies having little to no presence in the index. The index also excludes companies associated with alcohol, gambling and pork-related businesses, while companies are reviewed monthly and the full composition is reviewed twice yearly. This framework ensures compliance with Islamic financial principles while maintaining a diversified portfolio of companies like Hindustan Unilever, TCS, UltraTech Cement and HCL Technologies.
The BSE 100 ESG Index follows a different methodology, considering how well companies perform on environmental responsibility, social conduct and corporate governance. As reported, the index includes BSE 100 companies whose ESG scores exceed a defined threshold, with scores assigned by an independent agency after assessing environmental approach, employee treatment and board functioning. Unlike Sattvic and Sharia indices, the ESG index does not automatically exclude particular business categories, instead selecting companies based on overall scores. The index includes companies such as Hindustan Unilever, TCS, UltraTech Cement and HCL Technologies, focusing on environmental, social and governance performance rather than religious or moral principles.
Fund houses can use all three indices as benchmarks for exchange-traded funds, index funds and other schemes, providing investors with diverse options. According to reports, the Sattvic 100 Index is aimed at investors who place importance on food-related and ethical considerations, while the Sharia index serves those following Islamic financial principles and the ESG index caters to investors prioritizing environmental and governance responsibilities. However, currently there is no direct fund or ETF linked to the Sattvic 100 Index, meaning investors must wait before they can invest in it directly. For investors who want their investments to reflect their beliefs as well as return expectations, the three indices offer different choices based on their specific values and investment philosophy.
