Nifty 50 vs Sensex

Investments

Nifty 50 (NSE) and Sensex (BSE) are India's two main equity market indices. Nifty 50 comprises 50 large-cap stocks; Sensex comprises 30. Both are free-float market-cap weighted. They move almost identically (correlation > 0.99). Nifty is more widely used for index funds and derivatives.

In detail

Nifty 50 vs Sensex comparison:nNifty 50: 50 stocks, NSE-based, base year 1995=1000nSensex: 30 stocks, BSE-based, base year 1979=100nCorrelation: >0.99 (effectively the same index)nnNifty for investors: Nifty 50 index funds and ETFs are the most popular equity investment vehicles. Nifty 500 (broader) captures 95% of market cap. Nifty Midcap 150, Nifty Smallcap 250 are sector/cap indices.nnSensex uses: historically significant benchmark, quoted in news, international investors use it as proxy for India.

Formula

Nifty computation: Sum of (Free float market cap of 50 stocks) / Base market cap x 1000nThe level reflects total market cap change relative to 1995 base

Real-life example

🇮🇳 India example

Nifty 50 at 22,000 means the 50-stock index is 22,000% above its 1995 base. The absolute number is less meaningful than % change. Year-to-date Nifty +15% means the average of 50 top stocks rose 15%. A Nifty 50 index fund would have returned approximately 15% to investors -- the index fund returns equal index minus 0.05-0.1% expense ratio.

Frequently asked questions

What is the Nifty 50 CAGR for the last 20 years? ▼

Approximately 12-13% CAGR (2004-2024), with reinvested dividends bringing total return to approximately 13-14%. This has significantly beaten inflation (6%) and all guaranteed savings instruments. Despite multiple 30-50% bear market falls in 2008, 2011, 2015-16, and 2020, long-term patient investors earned 12-13% CAGR.