What is the Nifty Commodities Index?

Investors track the Nifty Commodities index as it acts as a barometer of the country’s commodities segment, helping them assess market trends and manage commodity portfolio risk by investing in non-correlated assets.

Let’s explore the Nifty Commodities index, its constituents, stock selection criteria and its historical performance.

What Is the Nifty Commodities Index?

The Nifty Commodities index is a benchmark index that tracks the performance of 30 companies across the Indian commodities sector, listed on the NSE. These companies are selected based on free float market capitalisation and other eligibility criteria set by the NSE Indices Ltd.

The index value is calculated using the free float market capitalisation method, where the index value reflects the total free float market value of all the stocks in the index relative to a particular base market capitalisation value.

Constituents of Nifty Commodities Index

The following are 10 prominent companies in the Nifty Commodities index as per their weightage as of May 2026.

Since the Nifty Commodities index is re-balanced semi-annually, stay updated with the changes in the constituents and weightage by visiting the Upstox Nifty Commodities Index page.

Historical Performance of Nifty Commodities Index

Over the past 5 years, the Nifty Commodities index delivered a CAGR of 18.29% with a beta of 1.10 relative to the Nifty 50, indicating higher volatility than the broader market index.

Since its inception, the Nifty Commodities Index has experienced high volatility, yet delivered strong growth.

How Do You Invest in the Nifty Commodities Index?

You can invest in the Nifty Commodities index in the following ways.

Direct Investment

You can directly purchase the individual stocks included in the index and actively adjust your investment when the index is rebalanced. However, this approach requires significant manual effort, making investing tedious.

Index Funds

Index funds track the companies included in the Nifty Commodities index and offer SIPs (Systematic Investment Plans) to investors, allowing them to invest a fixed sum regularly and benefit from rupee cost averaging.

Exchange Traded Funds (ETFs)

ETFs replicate the Nifty Commodities index and are listed on the stock exchanges, allowing investors to trade their ETF investments easily during market hours.

Selection Criteria for Nifty Commodities Index

The companies for the Nifty Commodities index are selected based on the following eligibility criteria.

• Companies should be a part of the Nifty 500 at the time of review. If the number of eligible stocks representing a particular sector within Nifty 500 falls below 10, then the deficit number of stocks must be selected from the universe of stocks ranked within the top 800 based on both average daily turnover and average daily full market capitalisation based on the previous six-month period data used for index rebalancing of Nifty 500.
• Companies should be a part of the commodities sector.
• The company's trading frequency should be at least 90% in the last six months.
• The Company should have a minimum listing history of one month as of the cutoff date.
• The final selection of 30 companies should be based on their free-float market capitalisation.

Benefits of Investing in the Nifty Commodities Index

The following are the benefits of investing in the Nifty Commodities index.

Indicator of Industrial Growth

Companies involved in the Metals, Mining and Power sectors generally carry a higher weightage, which directly benefits from the growing industrial demand driven by rapid urbanisation and favourable economic conditions. As these factors strengthen, the index may rise, potentially increasing the value of your investment.

Portfolio DIversification

Since the index includes companies belonging to various sectors, your investment is diversified. Commodities often have low correlation with other sectors such as banking and IT, which helps reduce your overall portfolio risk.

Inflation Hedge

Inflation and commodity prices have a positive correlation, where if inflation rises, so do commodity prices, helping preserve the purchasing power of your capital.

Global Market Exposure

Investing in the Nifty Commodities sector offers exposure to international supply and demand dynamics, providing returns linked to global markets.

Risks of Investing in the Nifty Commodities Index

Before investing in the Nifty Commodities index, consider the following risks.

International Supply Chain Disruptions

The Nifty Commodities index is significantly impacted by the global supply chain disruption driven by geopolitical tensions. Factors such as increased crude oil prices, unfavourable tariff changes and weak demand can negatively impact the index and reduce the value of investments.

Concentration Risk

Companies with higher weights influence the overall index performance. If these companies perform well, the index may rise, offering better returns.

Currency Fluctuation

Since most commodities are traded in U.S dollars, if the rupee weakens against the dollar, imports would become more expensive, squeezing the profit margins of companies and consequently bringing down the index.

Cyclical Nature

The performance of the Nifty Commodities index is directly linked to the prevailing economic conditions. The index generally performs well during high industrialisation, infrastructure development and urbanisation and experiences sharp declines during economic slowdowns and recessions.

FAQs

What is the Nifty Commodities Index?

The Nifty Commodities index is a benchmark index that tracks the performance of 30 companies across the Indian commodities sector, listed on the NSE.

How many stocks are there in the Nifty Commodities Index?

There are typically 30 stocks in the Nifty Commodities index.

How is the Nifty Commodities Index calculated?

The Nifty Commodities index is calculated using the free float market capitalisation method, where the index value reflects the total free float market value of all the stocks in the index relative to a base market capitalisation value.

Who manages the Nifty Commodities Index?

The NSE Indices Ltd manages and rebalances the Nifty Commodities Index.

How can I invest in the Nifty Commodities Index?

You can directly invest in the individual stocks included in the Nifty Commodities index or, if you’re seeking a passive approach, via index funds or ETFs.

How often is the Nifty Commodities Index rebalanced?

The Nifty Commodities index is rebalanced semi-annually to ensure the index accurately reflects the performance of the commodities segment.