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Nifty50, Nifty100 or Nifty500: Which index gives you the best diversification?

Money ControlMoney Control · 55y ago
Nifty50, Nifty100 or Nifty500: Which index gives you the best diversification?
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The Nifty50 and Nifty500 are two popular index funds in India. The Nifty50 consists of the top 50 stocks listed on the National Stock Exchange (NSE) by market capitalization, while the Nifty500 comprises the top 500 stocks. Both indexes have significant overlap, with all 50 stocks of the Nifty50 also included in the Nifty500. However, the Nifty500 is considered more diversified due to its allocation to mid-cap and small-cap stocks. While the Nifty500 has outperformed the Nifty50 in recent years, it may not consistently beat the Nifty50 in the long term. A combination of Nifty50 and Nifty Next50 may provide sufficient exposure to large-cap stocks, while active funds can be considered for mid-cap and small-cap allocation.

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