NSE Emerging Indices Comparison 30Sep2024
(This
is for information purposes only. This should not be construed as a
recommendation or investment advice even though the author is a CFA Charterholder. Please consult your financial
adviser before taking any investment decision. Safe to assume the author has a vested
interest in stocks / investments discussed if any.)
This is an update of earlier blog named 'NSE Emerging Indices Comparison 31Mar2024' dated 30Apr2024. Please see this blog to know more about how these indices are constructed.
Today's blog explores how NSE's emerging indices, namely, Nifty Next 50, Nifty Midcap 150 and Nifty Smallcap 250 are doing in comparison to Nifty 500. The latest data are as of 30th of September, 2024.
NSE or National Stock Exchange of India Limited is a premier stock exchange in India, closely followed by BSE Limited.
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2. NSE Emerging Indices Comparison
Nifty Indices Limited is the index provider for NSE.
3. Fundamentals
Table
1 presents the returns, risks and valuation measures of four
indices, namely, Nifty 500, Nifty Next 50, Nifty Midcap 150 and Nifty Smallcap 250 (all data as of 30Sep2024) >
Please click on the image to view better >
On a year-to-date and one-year
basis, Nifty Next 50 has provided the best return of 45 and 72 per cent respectively, though
on a 5-year basis, Nifty Smallcap 250 has delivered the best of the four indices analysed.
Based on the risk measures of standard deviation and beta, Nifty Next 50 and Nifty Smallcap 250 indices are the most volatile indices.
On a trailing 12-month data of valuation measures, Nifty Midcap 150 is the most expensive -- with the highest price-earnings and price-to-book value and the lowest dividend yield.
4. Top 15 Stocks
Please click on the image to view better >
Of the four indices, Nifty 500 and Nifty Next 50 are having higher concentration risk compared to Nifty Midcap 150 and Nifty Smallcap 250. The share of top 5 and 10 stocks in Nifty 500 is 22 and 32 per cent respectively; whereas for Nifty Next 50, they are at 20 and 36 per cent respectively.
5. Top 10 Sectors
Please click on the image to view better >
In terms of exposure of the indices to top three and five sectors, Nifty Next 50 index is having the least concentration risk -- with share of top three and five sectors at 41 and 56 per cent respectively.
Summary
If you compare the data as of 31Mar2024 and 30Sep2024, these four indices have become more expensive when you compare them on the metrics of P/E ratio, P/B ratio and dividend yield.
Concentration of top five and 10 stocks has fallen slightly for Nifty 500 in the last six months. In terms of the share of top three and five sectors too, concentration risk for Nifty 500 index has decreased.
But concentration of top five and 10 stocks has increased, between end of Mar2024 and Sep2024, for Nifty Next 50, Nifty Midcap 150 and Nifty Smallcap 250 indices.
Sector concentration risk for Nifty Next 50 has fallen dramatically in the last six months -- this could be partly due to the index revision effected on 30Sep2024, when Trent and Bharat Electronics moved from Nifty Next 50 to Nifty 50 index.
In the last six months, sector concentration risk for Nifty Midcap 150 has fallen slightly, whereas for Nifty Smallcap 250, it has slightly increased.
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References and additional data:
Nifty Passive Insights Jun2024 PDF
NSE Index Methodology Document Sep2024 PDF
Check Rupee Vest MF portfolio for all stock weights
Raw data >
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Disclosure: I've got a vested interest in Indian stocks and other investments. It's safe to assume I've interest in the financial instruments / products discussed, if any.
Disclaimer: The analysis and opinion provided here are only for information purposes and should not be construed as investment advice. Investors should consult their own financial advisers before making any investments. The author is a CFA Charterholder with a vested interest in financial markets.
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