Nifty 100 is good, but there might be a smarter option

“I want to invest passively in large-cap stocks. Should I just go with a Nifty 100 index fund and keep it simple? Or is it better to split between Nifty 50 and Nifty Next 50?” At first glance, you’d consider the Nifty 100 because it covers the top 100 companies in the country in a single fund. Simple, broad and efficient. So, why own two funds (one covering Nifty 50 and the other tracking Nifty Next 50), right? Here’s the twist, though: While the Nifty 100 includes both Nifty 50 and Nifty Next 50 stocks, it’s heavily skewed toward the top 50. Over the past decade, the top 50 have consistently called the shots — their weight in the Nifty 100 has hovered between 82 and 88 per cent, averaging a hefty 85 per cent. That means you may not be getting as much exposure to the next set of rising stars as you think. So, imagine you invested Rs 10,000 in a Nifty 100 fund. Nearly Rs 8,500 would go into the top 50 companies, and only Rs 1,500 trickles down to the next 50. That’s not ideal, especially when the Next 50 have historically pulled more than their weight in returns. Given the subtle difference, let’s look at which option is better? Nifty 100 vs Nifty 50 + Nifty Next 50 Let’s bring in the numbers. We looked at five-year rollin

This article was originally published on June 03, 2025.