Nifty 50 vs Nifty Next 50: Comparing Performance, Risk, and Opportunities

The Indian stock market has two key indices that investors closely follow, Nifty 50 and Nifty Next 50. Both are part of the Nifty 100 family, but they differ in composition, sector exposure, and risk-return profile. Understanding the difference helps investors make better choices between stability and growth potential.

What is Nifty 50?

The Nifty 50 is a benchmark index of India’s top 50 companies across major sectors. It was launched on April 22, 1996, with a base date of November 3, 1995 and a base value of 1000.

• Market Representation: Covers 55.48% of NSE’s free-float market capitalisation (as of March 28, 2025).
• Trading Activity: Accounts for around 30.21% of NSE’s traded value in the last six months ending March 2025.
• Methodology: Computed using the Free Float Market Capitalisation weighted method since June 26, 2009.
• Rebalancing: Semi-annually.
• Variants: Nifty 50 USD, Nifty 50 Total Returns (Gross/Net), and Nifty 50 Dividend Points Index.

Sector Representation (Top sectors)

• Financial Services – 37.86%
• IT – 10.45%
• Oil & Gas – 9.99%
• Automobiles – 7.19%
• FMCG – 6.75%

Top Constituents by Weight

1. HDFC Bank – 13.71%
2. ICICI Bank – 9.41%
3. Reliance Industries – 8.39%
4. Infosys – 4.84%
5. Bharti Airtel – 4.65%

Performance Snapshot

• 1-Year Return: 18.89%
• 5-Year CAGR: 12.92%
• Dividend Yield: 1.38%
• P/E Ratio: 21.93

The Nifty 50 reflects the mature, stable, and liquid stocks of the Indian economy.

What is Nifty Next 50?

The Nifty Next 50 consists of the next 50 companies in the Nifty 100, after excluding Nifty 50 firms. Introduced on January 1, 1997, it had a base date of November 3, 1996, with a base value of 1000.

• Market Representation: Accounts for 11.50% of NSE’s free-float market capitalisation (as of March 28, 2025).
• Trading Activity: Contributes about 12.86% of NSE’s traded value in the six months ending March 2025.
• Methodology: Computed using the Free Float Market Capitalisation weighted method since May 4, 2009.
• Rebalancing: Semi-annually.
• Variants: Nifty Next 50 Total Returns Index.

Sector Representation (Top sectors)

• Financial Services – 20.30%
• FMCG – 11.20%
• Power – 8.63%
• Consumer Services – 8.52%
• Capital Goods – 7.95%

Top Constituents by Weight

1. InterGlobe Aviation (IndiGo) – 5.00%
2. Hindustan Aeronautics – 3.71%
3. Divi’s Laboratories – 3.61%
4. Vedanta – 3.11%
5. Varun Beverages – 3.02%

Performance Snapshot

• 1-Year Return: 21.04%
• 5-Year CAGR: 15.75%
• Dividend Yield: 1.34%
• P/E Ratio: 21.47

The Nifty Next 50 reflects emerging leaders and often acts as a pipeline for future Nifty 50 constituents.

Nifty 50 vs Nifty Next 50: A Quick Comparison

Angel One Nifty 50 Index Fund 

Angel One MF has introduced the Angel One Nifty 50 Index Fund, an index fund designed to replicate the performance of the Nifty 50. Its goal is to generate returns, before expenses, that are in line with the index’s total returns, though tracking errors may occur. Investors should also be aware that the scheme does not assure the achievement of its stated objective.

The fund requires a minimum investment of ₹1,000 and is well-suited for individuals aiming for long-term wealth creation by investing in equity and equity-linked instruments that form part of the Nifty Total Market Index.

Also Read: How ₹5,000 Monthly Investment Can Become ₹25 Lakh?

Conclusion

The Nifty 50 provides stability by tracking India’s largest and most liquid companies, while the Nifty Next 50 offers higher growth potential but with more volatility. Investors looking for steady, long-term returns often prefer Nifty 50, whereas those seeking emerging opportunities and higher risk-reward lean toward Nifty Next 50.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions. 

Mutual Fund investments are subject to market risks, read all scheme-related documents carefully.