NSE Launches Nifty 500 Ahimsa Index to Promote Ethical Investing and Enable New ETFs
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The benchmark has been developed in partnership with the Ahimsagain Foundation and follows the foundation's Ahimsa Investment Movement (AIM) methodology.
✨ Key Takeaways
NSE Indices, a subsidiary of the National Stock Exchange (NSE), has launched the Nifty 500 Ahimsa Index, a new thematic benchmark designed for investors looking to align their investments with ethical and non-violence principles. The index is expected to strengthen values-based investing in India while supporting the development of passive investment products such as exchange-traded funds (ETFs), Index Funds and structured investment solutions.
The benchmark has been developed in partnership with the Ahimsagain Foundation and follows the foundation's Ahimsa Investment Movement (AIM) methodology. Unlike traditional environmental, social and governance (ESG) indices, the Nifty 500 Ahimsa Index specifically screens companies based on their involvement in activities that may cause harm to animals.
Under the screening framework, companies are classified into Green, Orange and Red categories. Only companies falling under the Green category are eligible for inclusion, while those classified as Orange and Red are excluded from the index.
The index selects its constituents from the broader Nifty 500 universe, allowing investors to gain diversified exposure to Indian equities while adhering to ethical investment principles. Constituents are weighted according to their free-float market capitalisation, making the benchmark suitable for passive investment products.
The Nifty 500 Ahimsa Index has a base date of April 1, 2016, with a base value of 1,000. It will undergo semi-annual reconstitution to ensure that all constituent companies continue to satisfy the prescribed ethical criteria.
The launch reflects the growing demand for thematic and values-based investment strategies, as more investors seek portfolios that align with their social and ethical beliefs alongside financial objectives.
The development follows a similar initiative by BSE Index Services, which last month introduced the BSE Saatvik 100 Index, India's first Saatvik-themed benchmark derived from the BSE 500 universe for investors interested in value-driven investing.
Disclaimer: The article is for informational purposes only and not investment advice.