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Beyond NIFTY50: Explore these indices for next investment opportunity
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3 min read | Updated on June 22, 2024, 18:00 IST
SUMMARY
Investors who are starting their investment journey, sometimes need help with the most important part - the first step. Besides news and conversations with peers, what are other avenues to try and find your next investment opportunity? Well, in this article, we look at one possible way - that can help you.
Investors can explore several indices designed by the NSE on specific elements like sectors, strategy and themes.
New investors often face challenges in choosing the right stocks. One of their go-to solutions, to find a new opportunity, is to look for stocks from popular indices like the Nifty50 or Nifty Bank. However, investors can explore several indices designed by the NSE on specific elements like sectors, strategy and themes.
These indices could be a good reference point for retail participants as they search for their next investment opportunity. Let’s take a look at four such indices that you can explore to recalibrate your portfolio. They could help you with the most critical thing: taking the first step.
| Index | NIFTY 50 Next | NIFTY Total Market | NIFTY100 ESG | NIFTY SME Emerge Index |
|---|---|---|---|---|
| What is it? | Consists of 50 companies considered to be the next eligible ones to be included in the NIFTY 50 | Tracks 750 stocks covering large, mid, small and microcap segments | Reflects performance of companies based on certain environmental, social and governance (ESG) risk scores | Reflects the performance of a portfolio of eligible small and medium enterprises |
| Top 3 stocks and weights | Trent: 5.0%; Bharat Electronics: 4.3%; Tata Power: 3.9% | HDFC Bank: 6.6%; Reliance: 5.7%; ICICI Bank: 4.6% | HDFC Bank: 5.7%; Infosys: 5.6%; ICICI Bank: 4.2% | Network People Services Technologies: 5.6%; Jeena Sikho Lifecare: 4.8%; Oriana Power: 4.0% |
| Can I invest passively? | Yes | Yes | Yes | Not currently |
How have they performed?
Over the short and medium term, these indices have managed to deliver outperformance over the Nifty50.
Source: NSE; *Total return (as of April 30, 2024): Measures returns arising from changes in the stock price and dividend receipts.
A word of caution
Each of these indices carries its own risk. The Nifty SME Emerge for example provides exposure to relatively smaller stocks that are likely to be more volatile and risky. Our aim with this list is to help provide one more starting point for most investors. Before investing, each investor is requested to do their own due diligence.
In conclusion
As can be seen from the numbers, since all these indices have performed better than the NIFTY 50 in the past five years, it may be wise for investors to explore these indices in detail to hunt for the next big investment opportunity.
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