Is Nifty100 made up of all the same stocks that are part of Nifty50 and Nifty Next50?
Yes.
But does it mean that investing in Nifty100 is exactly the same as investing in Nifty50 + Next50?
The answer is – No.
Sounds odd?
The reason is that the weight of the 50 stocks of Nifty 50 in the Nifty100 is about 80%.
And only the remaining 20% of Nifty100 weight is made up of the 50 stocks coming from the Next50 index. If till now you believed that it is simpler to just invest in one Nifty100 index instead of both Nifty50 and Next50, then indeed it is simpler, but it is not the same thing. So, if you invest in a Nifty100 index fund, then you get 80% exposure to the Nifty50 index and only 20% to the Next50 index.
So the overlaps are obvious at index levels (in the image below):
Another way to look at it is that if the Nifty50 does well, then Nifty100 will do well too as it’s made up primarily of Nifty 50. But in a hypothetical scenario where the Nifty50 does poorly and the Next50 does well, the combined Nifty100 will do poorly too, as only 20% of Nifty100 is made up of the performing Next 50 index.
Related Reading 1 – Nifty50 vs Nifty Next50 Index funds
Related Reading 2 – All Nifty Indexes Explained
Disclaimer – The funds shown above are for illustration only. It is not a recommendation to buy/sell/hold. Please get in touch with your investment advisor to get customized investment advice based on your risk profile and unique requirements.
Don’t Forget – Investments in the securities market are subject to market risks. Read all the related documents carefully before investing.