BSE Index Services on Monday announced the launch of a dedicated housing finance index, marking a move to create a formal benchmark for companies operating in the segment and expand avenues for passive investment strategies in the space.

The newly introduced BSE Housing Finance Index will track companies classified under housing finance within the broader BSE 1000 universe, offering a focused lens on the segment’s performance. “The Index is derived from the constituents of BSE 1000 Index that are classified under Housing Finance as the Basic Industry,” the exchange said in its statement .

The index has a base value of 1,000 and a first value date of June 22, 2015, and will be reconstituted semi-annually in June and December.

Designed to support ETFs and passive funds

The exchange said the index has been designed with passive investment strategies in mind, including exchange-traded funds (ETFs) and index funds, while also serving as a benchmark for portfolio management services (PMS) and mutual fund schemes.

“This new index can be used for running passive strategies such as ETFs and Index Funds. It can also be used for benchmarking of PMS strategies, MF schemes and fund portfolio,” the statement said.

The move is expected to improve visibility for the housing finance segment, which has so far been tracked only as part of broader financial services indices.

Constituents and structure

According to the index snapshot, the BSE Housing Finance Index comprises 11 stocks, with leading housing finance companies dominating the weightage.

Top constituents include LIC Housing Finance, PNB Housing Finance and Sammaan Capital, followed by players such as Home First Finance Company and Bajaj Housing Finance.

The index follows a capped free float-adjusted market capitalisation methodology, with the financial services sector accounting for 100% of the composition .

Performance data suggests a mixed trajectory for the sector. The index has delivered negative returns over the past year with total returns at -12.84%, even as longer-term returns remain modestly positive, including 9.01% over three years and 3.94% over ten years.

Expanding investment universe

BSE said the introduction of the index would allow investors to access a broader range of opportunities within the housing finance segment. “Investors can now access a broader spectrum of market opportunities, further enriching their investment strategies with this latest addition,” the statement said .

The launch comes at a time when sector-specific indices are increasingly being used to build targeted investment products and track thematic trends within the broader financial ecosystem.