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1. Index Constituents Selection Criteria
A
fund must satisfy the following
four criteria to be a constituent of the FEFI
- Is
an
open-ended equity fund
- Has
a
Growth option
- Has
daily NAV pricing available
- Is
available for sale on FSM Platform
2. Returns
We
equal-weight the index so that
each fund in the index contributes equally to the overall index return.
The
index is not AUM weighted,
meaning that
returns for a fund with a smaller AUM will have the same impact on the
index as
another fund with a larger AUM. The index return thus reflects the mean
return
of the underlying funds on an equally-weighted basis. The FEFI will be
calculated in INR terms, i.e., the NAV of all the funds will be in INR.
Formula
#
Returns of consitutent funds since the index inception date
of 31 December 2008; they are calculated on NAV-to-NAV basis
3. Index Level & Inception Date
The
index is calculated on a daily basis
and is computed on all trading days. For a particular day, if more than
80% of
funds in the index do not have Net Asset Value (NAV), the index will
not be
computed for that particular date. The index was incepted at 1,000
points on
31 December 2008.
Only
Open
Ended Equity funds with Growth Option
are included in the index;
dividend
and dividend reinvestment options of a fund are not selected, as
considering
dividend and dividend reinvestment options led to duplication and
distortion of
the index values.
4. Index review
The
1st
review of the
FEFI will happen on 31st
December 2009, with subsequent
review periods
occurring semi-annually, i.e., 30th
June and 31st
December
every year. If
30th
June or
31st
December are non-working days, the indices will be
reviewed on
the next working day.
5. Dealing with
New Fund Addition (and Removal of Old / Liquidation)
The
index is reviewed twice a year
(30th June
and 31st
December) to incorporate
funds that have
been added to the platform. New funds on the FSM platform will be
included in
the index only on these two dates. The availability of daily NAV is the
key
criterion for the inclusion of a fund’s returns in the index.
While the index
covers open-ended funds, funds may cease subscription for a variety of
reasons.
Where the daily NAV is provided, the fund’s returns will
still be
incorporated
into the index.
A
fund which is not open for
subscription but still provides daily NAV will only be removed from the
index
on the review date (i.e., 30th
June and 31st
December).
If a fund is liquidated or merged with another fund, daily NAV ceases
and thus
a liquidated or a merged fund will not contribute to the
index’s
returns.
5. Component
funds
in the FSM All-Equity Fund Index (IN) as at 31 December 2008
There
are 79 component funds in the
FSM All-Equity Fund Index (IN) as at 31 December 2008.
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