Nifty Next 50
Nifty Next 50 is computed using the free-float market capitalization method wherein the level of the index reflects the total free-float market value of all the stocks in the index relative to a particular base market capitalization value.Next 50 can be used for a variety of purposes such as benchmarking fund portfolios, launching of index funds, ETFs and structured products.
Nifty Next 50 Index
- The index has a base date of November 03, 1996, and a base value of 1000
- The index aims to measure the performance of the next 50 large-cap companies which come after the top 50 companies on the basis of free-float market capitalization within NIFTY 100
- The selection of securities and weights are based on free-float market capitalization
- The NIFTY Next 50 Index represents about 10% of the free-float market capitalization of the stocks listed on NSE as on December 31, 2018
- As on December 2018, six months average daily turnover of all index constituents is approximately 13% of six months average daily turnover of all stocks listed on NSE
Stocks of NIFTY 50 and NIFTY Next 50 together form the part of the large-cap index –‘NIFTY 100’, where, subject to index criteria, the top 50 stocks based on the free-float market cap is represented by NIFTY 50 stocks and ‘next 50’ stocks is represented by NIFTY Next 50 stocks.
Nifty Next 50 Sector Weightage
NIFTY Next 50 has a well-diversified portfolio across sectors with the top 5 sectors accounting for 76% exposure. The index in all has exposure to 14 sectors with 11 sectors having individual weight lesser than 10% each. This makes NIFTY Next 50 a well-diversified index strategy which may appeal to proponents of ‘investment diversification’.
Sector Representation Sector Weight
Here is the List of sector with Weightage in Nifty Next 50 Index
- FINANCIAL SERVICES 29.13 % Sector Weightage
- CONSUMER GOODS 24.93 % Sector Weightage
- PHARMA 11.67 % Sector Weightage
- CEMENT & CEMENT PRODUCTS 6.90 % Sector Weightage
- ENERGY 6.74 % Sector Weightage
- AUTOMOBILE 5.12 % Sector Weightage
- SERVICES 3.97 % Sector Weightage
- CHEMICALS 2.81 % Sector Weightage
- METALS 1.98 % Sector Weightage
- TEXTILES 1.97 % Sector Weightage
- INDUSTRIAL MANUFACTURING 1.94 % Sector Weightage
- CONSTRUCTION 1.49 % Sector Weightage
- IT 0.96 % Sector Weightage
- TELECOM 0.38 % Sector Weightage
Top constituents by weightage
Here is the List of Stocks with weightage in Nifty Next 50 Index
- SBI Life Insurance Company Ltd. 4.83 % Stock Weightage
- HDFC Life Insurance Company Ltd. 4.16 % Stock Weightage
- Godrej Consumer Products Ltd. 3.69 % Stock Weightage
- Dabur India Ltd. 3.44 % Stock Weightage
- Hindustan Petroleum Corporation Ltd. 3.20 % Stock Weightage
- Shree Cement Ltd. 3.20 % Stock Weightage
- Divi’s Laboratories Ltd. 2.95 % Stock Weightage
- Petronet LNG Ltd. 2.83 % Stock Weightage
- Pidilite Industries Ltd. 2.81 % Stock Weightage
- ICICI Lombard General Insurance Company Ltd. 2.81 % Stock Weightage
NIFTY Next 50 has low weight concentration among individual stocks resulting in a highly diversified portfolio. On a stock level basis, NIFTY Next 50 boasts of a diversified and well-distributed portfolio with top 10 stocks contributing close to 35.4% exposure with individual stock weights ranging between 5.47% to 2.85%
Since its inception in November 1996, the NIFTY Next 50 index has delivered an annualized return (PR) of 16.3% as compared to 12.0% of NIFTY 50, a substantial excess return of 4.3% per annum. The outperformance of NIFTY Next 50 for period 10 year, 7 year and 5 year is even better at 6.1%, 6%, 5.4% respectively.
While the returns of NIFTY Next 50 have been impressive, the risk (read standard deviation) has been only marginally higher as compared to that of NIFTY 50 making the ‘return to risk’ ratio for the NIFTY Next 50 considerably better than that of the NIFTY 50 – at least for periods longer than 3 year.
NIFTY Next 50 has outperformed the NIFTY 50 in 13 out of 23 calendar years. Calendar years 1999, 2003, 2009, 2012 & 2017 specifically witnessed great outperformance by NIFTY Next 50.
Here is the List of Stocks based on weightage in Nifty Next 50 Index. SBI Life Insurance Company Ltd, HDFC Life Insurance Company Ltd, Godrej Consumer Products Ltd, Dabur India Ltd.
The NIFTY Next 50 Index represents 50 companies [Mostly Large cap Companies] from NIFTY 100 after excluding the NIFTY 50 companies.