S&P may bring in products based on global indices
Talking to Business Standard, S&P index services division managing director Robert Shakotko said, "We have observed that when the broader market does not do well, index-based products become popular. This holds true for Indian market as well."
S&P has decided to work closely with IISL, Crisil's joint venture with NSE, which offers Index services. "We are planning to hold talks with Indian Assets Management Companies that can offer index-based products to Indian investors," Shakotko said, adding that the product can be an exchange-traded fund based on the S&P 500 index, or BRIC markets' index, or something like this.
ETF is a passive fund wherein investments are made in index companies as per their individual weightage. In times of uncertainty, betting on indices rather than individual companies helps. Index-based products thus become popular.
Indian AMC Benchmark is going to introduce an index fund based on NSE's broader index S&P CNX 500 — an index of 500 companies comprising 92 per cent of NSE's total market cap. Such funds or ETFs can be offered to Indian investors listed in overseas markets