Angel One Nifty Total Market Index/ETF NFO review

Angel One Nifty Total Market Index Fund and ETF are the first products to be launched by Angel One Mutual Fund.

Incorporated in May, 2023, Angel One's launching of these two schemes comes close on the heels of SEBI's regulatory restrictions impacting their broking revenues.

Angel One's new fund and ETF opened for subscription on February 10, 2025, and will remain open to the public until February 21, 2025.

Both Angel One Nifty Total Market Index Fund and ETF are passive funds, which means they will try to replicate the Nifty Total Market Index.

About Nifty Total Market Index

Since the Angel One schemes will track the Nifty Total Market Index, let's look at it in greater detail.

The index consists of the top 750 stocks based on free-float market capitalisation, categorised as follows:

Basically, this index includes all the stocks from the Nifty 500 Index (1 to 500), plus the next 250 biggest stocks by market capitalisation. However, it's worth noting that SEBI does not officially categorise micro-cap stocks.

The index undergoes rebalancing twice a year—once in January and again in July.

On closer look, this index closely resembles the Nifty 500 index.

Constituents and Sectoral weightage
The top 10 stocks in Nifty Total Market Index and Nifty 500 have an almost identical weightage, as you can see below:

The sectoral weightage tells the same story, too.

The top five sectors in both indices are the same, with nearly matching weightages further reinforcing the similarity between the two indices.

Returns

The top 500 stocks in Nifty Total Market Index and Nifty 500 are the same. The only difference is that the former holds an additional 250 stocks from the micro-cap segment.

So, let's see if these extra stocks give the Nifty Total Market Index an edge.

Looking at the table, it's easy to assume that the Nifty Total Market Index would have significantly outperformed the Nifty 500, given its exposure to high-flying micro-cap stocks—something the Nifty 500 lacks. But does the data back this up? Let's see.

The difference? Barely noticeable—proving that despite its micro-cap exposure, the Nifty Total Market Index hasn't significantly outpaced the Nifty 500.

As we just saw, in the short to medium term, the difference in returns between these indices is minimal. But what about the long-term performance? Let's find out.

As the graph illustrates, the two indices move almost in sync, reinforcing how closely they mirror each other.

The five-year average rolling return (over the last 15-years) for the Nifty Total Market Index stands at 12.7 per cent, just 0.2 percentage points higher than the Nifty 500's 12.5 per cent.

Despite the Nifty Total Market Index including high-performing micro-cap stocks, its returns remain similar to those of the Nifty 500 Index.

The reason? A significant 96 per cent overlap between the two indices, making them nearly identical.

With micro-cap stocks accounting for just 3 per cent of the Nifty Total Market Index, even stellar performance from these 250 stocks has little impact on the index's overall returns.

Should you invest?

As we've seen, the Nifty Total Market Index doesn't offer much more than the Nifty 500. While it includes 250 additional stocks, the return benefit is negligible.

That said, investors interested in a broader index may still find value in the Nifty Total Market Index, but for most, the Nifty 500— remains a decent option.

Also read: Ask these three questions before investing in an NFO