Nifty Next 50 Index - uncovering the truth behind it's underperformance!
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The Nifty Next 50 houses
The Nifty Next 50 houses the 50 top companies by market capitalisation, after the Nifty 50. This index caught the limelight over the past month for featuring a handful of the Adani group stocks.
In this video, Vidya Bala (co-founder - PrimeInvestor) discussed the dip in performance of the Nifty Next 50 index, the structure of the Nifty next 50 index and finally if you should invest in this index or not.
One of the top reasons for the underperformance of the index is the high churn it sees, as too many stocks are underperforming and get removed due to underperformance. Another reason is that the index acts as a gateway to the Nifty 50 index and a recycle bin to stocks exiting the Nifty 50, and many stocks may not make it to the Nifty 50 and end up underperforming in the Next 50 index.
Additionally, the index is essentially a high-PE index, which makes it more volatile and poor at containing downsides. The Nifty Next 50's rolling 1-year return has been slackening in performance over the past few years, just about keeping pace with the Nifty 50 and then underperforming in the past year.
The Next 50 has been trailing the Nifty 50 by a margin of 3-10 percentage points on a 1-year basis. Against the Midcap 150, the mid-cap fueled market rally saw the Next 50 fall well behind in the past few years.
💬 "If market cap grows assuming that it is supported by earnings they do deliver well, if market cap grows without the support of earnings in the medium to long term they don't deliver."
Link to article :
📙 Nifty Next 50 – what should you do with your investments? : https://primeinvestor.in/nifty-next-5...
Chapters :
0:00 - Introduction to the Nifty Next 50 index
1:06 - Overview of the Nifty Next 50 index
2:54 - Constituents of the Nifty Next 50 index
3:42 - High churn in the Nifty Next 50 index
4:59 - A gateway? Or a recycle bin?
6:01 - Causing havoc before exiting
7:33 - IPO entrants into the Nifty Next 50
8:07 - Reason for underperformance
9:38 - Summing up
You can register for a 14-day free trial to get access to a few of our Mutual fund recommendations, premium screeners, articles and other DIY tools to invest in Stocks , Mutual Funds , Bonds & more.
⭐️ Sign up for a free 14 day free trial here : https://primeinvestor.in/be-prime/
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#niftynext50 #fundreview #mutualfunds #UTIniftynext50 #indexfunds #PrimeFunds
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🏆 Prime Stocks - our list of recommended stocks - https://primeinvestor.in/prime-stocks
🏆 Prime Funds - our list of recommended mutual funds - https://primeinvestor.in/best-mutual-...
🏆 Ready to use portfolios - https://primeinvestor.in/prime-portfo...
🏆 Our smallcase portfolios - https://primeinvestor.in/smallcase
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Disclaimer :
PrimeInvestor Financial Research Pvt Ltd (with brand name PrimeInvestor) is an independent research entity offering research services on personal finance products to customers. We are a SEBI registered Research Analyst (Registration: INH200008653).
In this video, Vidya Bala (co-founder - PrimeInvestor) discussed the dip in performance of the Nifty Next 50 index, the structure of the Nifty next 50 index and finally if you should invest in this index or not.
One of the top reasons for the underperformance of the index is the high churn it sees, as too many stocks are underperforming and get removed due to underperformance. Another reason is that the index acts as a gateway to the Nifty 50 index and a recycle bin to stocks exiting the Nifty 50, and many stocks may not make it to the Nifty 50 and end up underperforming in the Next 50 index.
Additionally, the index is essentially a high-PE index, which makes it more volatile and poor at containing downsides. The Nifty Next 50's rolling 1-year return has been slackening in performance over the past few years, just about keeping pace with the Nifty 50 and then underperforming in the past year.
The Next 50 has been trailing the Nifty 50 by a margin of 3-10 percentage points on a 1-year basis. Against the Midcap 150, the mid-cap fueled market rally saw the Next 50 fall well behind in the past few years.
💬 "If market cap grows assuming that it is supported by earnings they do deliver well, if market cap grows without the support of earnings in the medium to long term they don't deliver."
Link to article :
📙 Nifty Next 50 – what should you do with your investments? : https://primeinvestor.in/nifty-next-5...
Chapters :
0:00 - Introduction to the Nifty Next 50 index
1:06 - Overview of the Nifty Next 50 index
2:54 - Constituents of the Nifty Next 50 index
3:42 - High churn in the Nifty Next 50 index
4:59 - A gateway? Or a recycle bin?
6:01 - Causing havoc before exiting
7:33 - IPO entrants into the Nifty Next 50
8:07 - Reason for underperformance
9:38 - Summing up
You can register for a 14-day free trial to get access to a few of our Mutual fund recommendations, premium screeners, articles and other DIY tools to invest in Stocks , Mutual Funds , Bonds & more.
⭐️ Sign up for a free 14 day free trial here : https://primeinvestor.in/be-prime/
🙌 PrimeInvestor Community - https://community.primeinvestor.in
#niftynext50 #fundreview #mutualfunds #UTIniftynext50 #indexfunds #PrimeFunds
Our popular products
🏆 Prime Stocks - our list of recommended stocks - https://primeinvestor.in/prime-stocks
🏆 Prime Funds - our list of recommended mutual funds - https://primeinvestor.in/best-mutual-...
🏆 Ready to use portfolios - https://primeinvestor.in/prime-portfo...
🏆 Our smallcase portfolios - https://primeinvestor.in/smallcase
🔔 Follow us on Social Media for daily updates! 🔔
Twitter - Twitter: primeinvestorin
Facebook - Facebook: PrimeInvestor.in
LinkedIn - LinkedIn: primeinvestorin
Disclaimer :
PrimeInvestor Financial Research Pvt Ltd (with brand name PrimeInvestor) is an independent research entity offering research services on personal finance products to customers. We are a SEBI registered Research Analyst (Registration: INH200008653).
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