CRISIL Research, India’s largest independent and integrated research house, announced the launch of nine indices – four in the broad government securities (G-sec or gilt) segment and five in the money market segment. The broad-based gilt indices will be all-inclusive – meaning these will consider all eligible securities as constituents – unlike liquidity-based ones that select only the top liquid securities.
Broad-based indices can be replicated by using a sampling approach, where each risk bucket of the index is replicated by using a security having similar risk characteristics. These will follow the buy-and-hold strategy instead of reconstituting on a monthly basis to exclude off-the-run issues and will therefore have lower churn. At the other end, the five money market indices announced include one designed from the perspective of the insurance industry. It would be in compliance with the investment restrictions and constraints prescribed by the insurance regulator. The other four money market indices are in the lower-maturity range (1-2 months) across commercial paper (CP), certificate of deposit (CD) and Treasury bill (T-bill) indices.
The nine indices unveiled increase CRISIL’s tally to 96 standard indices – across bond, gilt, money market, hybrid and commodity segments – that are used widely by asset managers to benchmark their products and portfolios.
The new indices are CRISIL 1 Month CP Index, CRISIL 1 Month CD Index, CRISIL 1 Month T-Bill Index, CRISIL 2 Month T-Bill Index, CRISIL Money Market Index – Insurance, CRISIL Broad Based Gilt Index, CRISIL Broad Based Long Term Gilt Index, CRISIL Broad Based Medium Term Gilt Index and CRISIL Broad Based Short Term Gilt Index