Summary:
BSE has launched the BSE Saatvik 100, India’s first ethical investing index, through its subsidiary BSE Index Services. The index consists of 100 companies selected from the BSE 500 that meet Saatvik principles focused on ethics, responsibility, and long-term value creation. It is designed to serve as a benchmark for ETFs, index funds, PMS, mutual funds, and other value-based investment products. Financials form the largest sector allocation, with major constituents including HDFC Bank, ICICI Bank, Reliance Industries, Infosys, and SBI. The launch reflects growing investor demand for investment options that align financial goals with ethical and social values
A wholly owned subsidiary of BSE, called BSE Index Services Pvt. Ltd., has announced the launch of the BSE Saatvik 100 – India’s first Saatvik Index, an important milestone in India’s developing investment scenario. The newly created index helps investors get exposure to companies which are following ethical and values-based approach while having a sharp eye on wealth creation in the long run.
The BSE Saatvik 100 index is created from the BSE 500 Index, and consists of 100 companies that have followed the Saatvik guidelines. The term “Saatvik” means purity, responsibility, and ethics, and signifies an investment approach that is more than just the financials aspect of things.
Rising Demand for Saatvik Investing
This launch is happening amidst rising investor interest in the ESG investment category. More and more, investors are looking for opportunities which do not only provide them profits, but also match with their values and make a positive contribution to society.
Ashtosh Singh, Managing Director and CEO, BSE Index Services, said that the launch of BSE Saatvik 100 Index has increased the choice of themes for thematic investments in the market. He said that the preferences of investors are going beyond mere financial factors and have become ethical and philosophical in nature.
Singh further said that the index has provided a credible base for passive, structured and other value-based investments.
Designed for ETFs, Index Funds and PMS
According to BSE, the index can be used as a benchmark for different financial products such as ETFs, Index funds, Portfolio Management Services (PMS), mutual funds schemes and other types of investment portfolios.
The creation of the Saatvik 100 enables people to diversify their portfolio based on ethical investments. At the same time, it expands the number of thematic and benchmark indexes created by BSE.
Financial Services Lead Sector Allocation
Financials occupy an overwhelming majority in the BSE Saatvik 100 Index, accounting for 37.55% of the index and being the highest in contribution. The next highest sectors in order are consumer discretionary and energy.
Some other notable sectors in the index are commodities, industrials, utilities and telecom. Besides, there is also some exposure in the services, FMCG and healthcare sectors.
Top Constituents Reflect Large-Cap Bias
Among the individual stocks, HDFC Bank forms the largest weighting of the index. This is followed by ICICI Bank and Reliance Industries. Some other important stocks are Infosys, State Bank of India, Axis Bank, Kotak Mahindra Bank and Mahindra & Mahindra.
It shows a clear bias towards large cap companies which have a well-established business model.
Boost for Ethical Investment Products
The initiative has been received well among those involved in investments in ethical practices. According to the Wealth Company Mutual Fund, the BSE Saatvik 100 methodology and universe of stocks is in sync with its philosophy of excluding companies involved in alcohol, tobacco, gambling, obscene forms of entertainment, narcotic substances, leather and meat, and insecticides.
According to market experts, the BSE Saatvik 100 will help hasten the development of ethical investments in India through offering a standard benchmark for value-based investment portfolios, which may result in further launching of ETFs and other investment products based on ethical principles.
