Nifty Next 50

Sector Representation

The selection of securities and weights are based on free float market capitalization. When it comes to sector-wise representation of the index, the consumer goods sector tops the list at 25.60% while the financial services sector follows at 17.65%.

Eligibility Criteria

According to the NIFTY market indices methodology document, which is published by the India Index Services & Products Limited, the following are the eligibility criteria to be fulfilled by the companies to become a part of the NIFTY NEXT 50 index:

1. In order to be considered to be included in the NIFTY NEXT 50 index, companies must form part of NIFTY 100, but should not be a part of the NIFTY 50.
2. Eligibility criteria for newly listed security are checked based on the data for a three-month period instead of a six-month period

The NIFTY NEXT 50 index has a base date of November 03, 1996 while the base value is 1,000. As per the whitepaper of NIFTY Next 50 index, it has historically outperformed NIFTY 50 index since its inception with a higher return to risk ratio for longer periods.

How is NIFTY NEXT 50 calculated?

The NIFTY NEXT 50 is calculated using free float market capitalisation method. It is calculated online on all days that the National Stock Exchange of India is open for trading in equity shares and disseminated through trading terminals and website. Some of the popular utilisation of the NIFTY NEXT 50 index is to benchmark fund portfolios, launch Exchange Traded Funds (ETFs), index funds, and structured products. Constituent changes in the index along with corporate actions like right issuance, stock splits etc. are taken into consideration at the time of calculating the index. As NIFTY NEXT 50 is included in the broad based indices, it is reviewed twice every year based on six month data ending January 31 and July 31.

The NIFTY NEXT 50 is calculated based on the following formula:

Free Float Market Capitalisation = Shares Outstanding x Price x Investible Weight Factor (IWF)

Index Value = [(Current Free Float Market Capitalisation)/(Base Free Float Market Capitalisation)] x (Base Index Value)

Investible Weight Factor means the number of shares which are available to the public for general trading.

How to Invest in NIFTY NEXT 50?

You can invest in individual stocks that are a part of NIFTY NEXT 50. It is strongly advised to do a thorough research before investing your hard-earned money in stock markets as it is volatile in nature.

Stocks vs. Mutual Funds: here's what we recommend

Stock market investments require a lot of research and knowledge. They do not generally offer any tax benefits and are regarded as high-risk investments. Hence,it is crucial to have a diversified portfolio. At Bankbazaar, we encourage our readers to invest on mutual funds.It doesn't require a lot of knowledge and equity linked mutual fund schemes offer tax benefits. Additionally, since mutual funds comprise stocks from multiple companies, they help in building a diversified portfolio.