NIFTY 200 Alpha 30 Index

The NIFTY 200 Alpha 30 Index tracks the top 30 stocks from the NIFTY 200 companies with the highest alpha. The Alpha score measures how much a stock has outperformed the market. This index is a valuable tool for investors looking to boost their portfolio with strong performers.

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What is the NIFTY 200 Alpha 30 Index?

The NIFTY 200 Alpha 30 is a stock market index created by Nifty Indices in India. It tracks the performance of 30 large-cap companies specifically chosen from the broader NIFTY 200 index. Here's what makes this index unique:

  • Focus on Alpha: The NIFTY 200 Alpha 30 uses a factor called "Jensen's Alpha" to pick its member stocks. Jensen's Alpha measures a stock's performance compared to the returns expected based solely on its market capitalization. Companies with positive alpha are seen as outperforming the market, and these are the ones that get included in the NIFTY 200 Alpha 30.

  • Weight by Alpha Score: Not all companies in the NIFTY 200 Alpha 30 have the same weight. The weight of each stock in the index is based on its Jensen's Alpha score. Companies with higher alpha scores have a greater influence on the overall index performance.

  • Capped Weighting: To prevent any single company from dominating the index, there's a cap on how much weight a stock can have. The maximum weight is set at the lower of 5% or five times the weight the stock has in the regular NIFTY 200 (based on market capitalization).

Key Features of NIFTY 200 Alpha 30 Index

The NIFTY 200 Alpha 30 Index is an equity index designed to capture potential outperformance relative to the broader market. Here are its key features:

  • The index selects 30 stocks from its parent, the NIFTY 200 index.

  • Stocks are chosen based on Jensen's Alpha. This metric measures a stock's return relative to the expected return based on the Capital Asset Pricing Model. Simply put, it identifies stocks that have historically outperformed expectations. Only stocks with positive Jensen's Alpha qualify for inclusion.

  • The weight of each stock in the index is based on its Jensen's Alpha score. Higher alpha scores translate to a larger weighting in the index. This tilts the index towards stocks with a greater potential for outperformance.

  • To prevent excessive concentration in any single stock, weights are capped at the lower of 5% of the index or 5 times the stock's weight based on free-float market capitalization. This ensures diversification and reduces exposure to any individual company.

  • The index is rebalanced quarterly to reflect changes in alpha scores and market conditions. This ensures the index stays focused on capturing alpha-generating stocks.

Information About NIFTY 200 Alpha 30 Index

Particulars Details
Launch Date 21 July 2022
No. of Constituents 30
Base Date 1 April 2005
Base Value 1000
Calculation Frequency Real-Time
Methodology Alpha Based Weighting
Index Rebalancing Quarterly

[Source: nseindia.com] The above mentioned returns are total returns.  Data updated as of August 28, 2024.

Performance of NIFTY 200 Alpha 30 Index and Other Indices

NIFTY 200 Alpha 30 Index has outperformed the NIFTY 200 by a considerable margin over the long term in the last 3-year, 5-year, and 10-year periods.

and since inception.

Index Name  3-Year Returns 5-Year Returns 10-Year Returns
NIFTY 200 Alpha 30 28.97% 34.24% 25.89%
NIFTY 200 17.50% 18.67% 14.95%
Nifty 100  18.10% 19.70% 14.40%
Nifty Midcap 100 28.10% 30.90% 19.50%
Nifty Smallcap 100 22.00% 29.40% 15.40%

[Source: nseindia.com] The above-mentioned returns are total returns.  Data as of August 01, 2024.

Which are the Constituent Stocks of the NIFTY 200 Alpha 30 Index?

Company’s Name  Weightage (%)
REC Ltd. 5.77
Power Finance Corporation Ltd. 5.38
Trent Ltd. 5.11
Bharat Heavy Electricals Ltd. 5.01
Bharat Electronics Ltd. 4.45
Dixon Technologies (India) Ltd 4.37
Hindustan Aeronautics Ltd. 4.28
Indus Towers Ltd. 4.13
Lupin Ltd. 3.92
Zydus Life Sciences Ltd. 3.57
Punjab National Bank 3.53
NMDC Ltd. 3.42

[Source: nseindia.com] Data updated as of August 28, 2024.

What are the Sectors Included in the NIFTY 200 Alpha 30 Index?

Top Sectors Weightage (%)
Capital Goods 24.49
Financial Services 17.30
Healthcare 10.36
Automobile and Auto Components  9.81
Oil, Gas & Consumable Fuels 7.34
Telecommunication 6.30
Services  5.15
Consumer Services 5.11
Consumer Durables 4.37
Metals & Mining 3.42
Information Technology 3.27
Power  3.08

[Source: nseindia.com] Data updated as of August 28, 2024.

NIFTY 200 Alpha 30 Index Fundamentals

P/E* P/B** Dividend Yield 
27.13 5.38 1.14

*P/E: Price-to-Earnings Ratio **P/B: Price-to-Book Ratio Data updated as of August 28, 2024.

NIFTY 200 Alpha 30 Index Methodology

  • Base Date and Value: The NIFTY 200 Alpha 30 Index was established on April 01, 2005, with a base value of 1000.

  • Nifty 200 Link: Companies that are part of, or are eligible to be part of, the NIFTY 200 are considered for inclusion.

  • Minimum Track Record: Only stocks with a listing history of at least one year are included.

  • Derivatives Availability: The stock must be actively traded in the derivatives segment (F&O) to ensure liquidity.

  • Alpha Focus: Positive Jensen's Alpha is a must for inclusion, indicating the stock's potential to outperform the broader market.

  • Limited Membership: The index is capped at 30 companies, strictly based on their Jensen's Alpha scores.

  • Weight by Alpha Score: A higher alpha score translates to a greater weight in the index composition.

  • Concentration Limits: To prevent overexposure to any single company, each stock's weight is capped at the lower of 5% or 5 times its weight based on its free-float market capitalization.

  • Quarterly Adjustments: The index composition is reviewed and rebalanced quarterly on the last trading day of February, May, August, and November.

  • Professional Management: A dedicated team at NSE Indices manages the NIFTY 200 Alpha 30, ensuring adherence to the defined methodology.

  • Transparent Governance: A three-tier structure, including a board of directors, an advisory committee, and a maintenance sub-committee, oversees the index.

How to Invest in NIFTY 200 Alpha 30 Index Fund Through Policybazaar?

Follow the steps below:

Step 1: Enter your name and contact number in the form available on this page. 

NOTE: Your credentials are completely secure and will be used to provide you with personalised plan benefits.

Step 2: Insert essential information such as your city, age, and name.

Step 3: Compare from the following funds available with different investment plans-

Use the criteria like their performance, ratings, and other relevant information.

Step 4: Select the investment option that suits your risk tolerance, budget, and financial goals.

Step 5: Select "Invest Now" and proceed by following the prompts displayed on the screen to finalise your purchase.

Step 6: Provide the required KYC details and complete the payment procedure.

Step 7: Upon successful payment, you will receive confirmation of your purchase.

Frequently Asked Questions

  • What are the benefits of investing in the NIFTY 200 Alpha 30 Index?

    The potential benefit is achieving higher returns than the broader market by focusing on alpha-generating stocks.
  • Are there any risks associated with the NIFTY 200 Alpha 30 Index?

    Yes, there are two main risks. First, the index tends to be more volatile due to the focus on alpha stocks, which can experience larger price swings. Second, the index may experience sharper drops during market downturns compared to broader market indexes.
  • Who should consider investing in the NIFTY 200 Alpha 30 Index?

    This index might be suitable for investors with a higher risk tolerance who are comfortable with potential price fluctuations and have a long-term investment horizon. It can also be appealing to investors seeking the possibility of enhanced returns.
  • What are some alternatives to the NIFTY 200 Alpha 30 Index?

    Consider the NIFTY 200 Index for broader diversification and potentially lower volatility. The NIFTY 50 Index offers a good balance between diversification and growth potential by tracking the top 50 companies.
  • How does the NIFTY 200 Alpha 30 Index choose stocks?

    The index uses Jensen’s Alpha, a statistical measure, to identify stocks within the NIFTY 200 that have historically outperformed the market after adjusting for risk. These alpha-generating stocks are then weighted more heavily in the index based on their alpha score.
  • Is there a minimum investment amount for the NIFTY 200 Alpha 30 Index?

    No, you don't directly invest in the index itself. However, you can gain exposure through Exchange Traded Funds (ETFs) that track the NIFTY 200 Alpha 30 Index. These ETFs typically have minimum investment amounts which can vary depending on the provider.
  • How often is the NIFTY 200 Alpha 30 Index rebalanced?

    The index composition is reviewed and rebalanced quarterly (March, June, September, and December) to ensure it reflects the latest alpha scores and market conditions.
  • How can I buy Nifty 200 Alpha 30 Index funds?

    You can purchase the Nifty 200 alpha 30 index funds through the available best investment plans like:
    • Bajaj Allianz Life Goal Assure II Plan

    • Bajaj Allianz Life Capital Guarantee Solution

    • Bajaj Allianz LongLife Goal Plan

    • Bajaj Allianz Smart Wealth Goal III- WOP

    • HDFC Life Click2Invest Plan

    • HDFC Life Capital Guarantee Solution

    • HDFC Life Click2Wealth Plan

    • HDFC Life Sampoorn Nivesh - Classic Waiver Benefit

Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by any insurer. This list of plans listed here comprise of insurance products offered by all the insurance partners of Policybazaar. The sorting is based on past 10 years’ fund performance (Fund Data Source: Value Research). For a complete list of insurers in India refer to the Insurance Regulatory and Development Authority of India website, www.irdai.gov.in
*Past 10 Year annualised returns as on 01-12-2024
*All savings plans are provided by the insurer as per the IRDAI approved insurance plan. Tax benefit is subject to changes in tax laws. Standard T&C Apply
^The tax benefits under Section 80C allow a deduction of up to ₹1.5 lakhs from the taxable income per year and 10(10D) tax benefits are for investments made up to ₹2.5 Lakhs/ year for policies bought after 1 Feb 2021. Tax benefits and savings are subject to changes in tax laws.
¶Long-term capital gains (LTCG) tax (12.5%) is exempted on annual premiums up to 2.5 lacs.
**Returns are based on past 10 years' fund performance data (Fund Data Source: Value Research).

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