NIFTY COMMODITIES
In this index, it is specifically designed to reflect the behavior and performance of a diversified portfolio of the companies representing the commodities segment that includes sectors such as Oil, Petroleum Products, Cement, Power, Chemical, Sugar, Metals, and Mining. Also, the Nifty Commodities Index comprises of 30 companies that are listed on the National Stock Exchange (or NSE).
During rebalancing of shares/ change in index constituents/change in investible weight factors (or IWFs), and the weightage of the index constituent (where applicable) is being capped at 10%. It can be further used for a variety of purposes such as the launching of index funds, benchmarking fund portfolios, and ETFs and structured products.
The Eligibility Criteria for the Selection of Constituent Stocks:
- The companies must rank within the top 800 by average full market capitalization as well as average daily turnover for the last 6 months.
- The companies should also form a part of the commodities sector.
- Also, the company's trading frequency shall be at least 90% in the last 6 months.
- It should also have a listing history of at least 6 months. Also, a company that comes out with an IPO would be eligible for the inclusion in the index, only if it fulfills the normal eligibility criteria for the index for 3 months instead of 6 months.
- Also, the final selection of 30 companies can be made based on the free-float market capitalization of the companies.
Index Re-Balancing: It is done based on a semi-annual basis, and the cut-off date is January 31 as well as July 31 of each year, i.e., and for a semi-annual review of indices, average data for 6 months ending the cut-off date is considered. Also, 4 weeks before the notice is given to the market from the date of the change.
Index Governance: Also, a professional team manages all NSE indices, and there is a three-tier governance structure, which comprises the Board of Directors of NSE Indices Limited, the Index Advisory Committee (Equity) and the Index Maintenance Sub-Committee.