Nifty Alpha 50 Index

The Nifty Alpha 50 Index tracks the performance of top 50 stocks with the highest alpha over the past year. The higher the alpha, the better the stock has performed compared to the overall market.

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What is the NIFTY Alpha 50 Index in 2024?

The NIFTY Alpha 50 Index is a stock market index on the National Stock Exchange of India (NSE) that measures the performance of 50 stocks with the highest alpha.

Alpha measures the excess returns of an investment in comparison to a benchmark index, indicating how much a stock has outperformed the market on a risk-adjusted basis. It is designed to help you find stocks with strong potential for high returns.

Key Features of the NIFTY Alpha 50 Index

  • High Alpha Focus: It tracks the top 50 stocks with the highest alpha (outperformance) over the past year from a pool of the top 300 liquid and established companies.

  • Alpha-Based Weighting: Weights are assigned based on alpha values, giving the strongest outperformers the largest allocation.

  • Strict Selection Criteria: Companies must rank among the top 300 by size and liquidity and have a minimum one-year listing history.

  • Diversified Exposure: The index includes stocks from various sectors to manage risk effectively.

  • Regular Rebalancing: It is rebalanced every six months to ensure it remains focused on recent high-alpha performers.

  • Investment Utility: The Nifty Alpha 50 Index serves as a foundation for index funds and ETFs, offering passive investment options.

Highlights of the NIFTY Alpha 50 Index

Particulars Details
Launch Date November 19, 2012
No. of Constituents 50
Base Date December 31, 2003
Base Value 1000
Calculation Frequency Real-Time
Methodology Alpha Based Weighting
Alpha Calculation Trailing one-year prices adjusted for corporate actions; ranked in descending order.
Index Rebalancing Quarterly (uses data from the last 6 months ending in February, May, August, and November)
Index Governance Overseen by the Board of Directors, Index Advisory Committee, and Index Maintenance Sub-Committee.

Performance of NIFTY Alpha 50 Index and Other Indices

NIFTY Alpha 50 Index has always outperformed other indices over 1-year, 5-year, and period since inception.

Index Name  3-Year Returns 5-Year Returns 10-Year Returns
NIFTY Alpha 50  26.50% 32.90% 26.40%
NIFTY Midcap 150  26.30% 26.60% 19.90%
NIFTY Smallcap 250 25.70% 25.90% 16.80%
NIFTY Smallcap 250 Quality 50 26.10% 26.90% 21.70%
NIFTY 50 15.30% 15.80% 13.20%

[Source: nseindia.com]*The above-mentioned returns are total returns.*Data updated as of June 27, 2024.

What are the Constituent Stocks of the NIFTY Alpha 50 Index?

Company's Name  Weightage (%)
Suzlon Energy Ltd. 4.49
BSE Ltd. 4.45
Rail Vikas Nigam Ltd. 4.32
Indian Railway Finance Corporation Ltd. 4.17
Adani Power Ltd. 3.47
Prestige Estates Projects Ltd. 3.05
REC Ltd. 2.97
Adani Green Energy Ltd. 2.84
Bharat Heavy Electricals Ltd. 2.79
Power Finance Corporation Ltd. 2.78

[Source: nseindia.com] *Data updated as of June 27, 2024.

What are the Sectors Included in the NIFTY Alpha 50 Index?

Top Sectors Weightage of Invested Assets
Financial Services 28.00%
Capital Goods  18.59%
Power 7.94%
Healthcare 6.78%
Realty 6.69%
Construction  6.65%
Information Technology  5.31%
Consumer Services 5.92%
Consumer Durables  4.87%
Metals & Mining 4.05%
Automobile and Auto Components  3.60%
Fast Moving Consumer Goods 1.62%

[Source: nseindia.com]  *Data updated as of June 27, 2024.

What Are the Returns of the NIFTY Alpha 50 Index?

Index Returns (%) QTD** YTD** 1 Year 5 Years Since Inception
Price Return 12.69 25.73 81.50 33.99 21.47
Total Return 12.70 25.95 82.80 34.90 22.59

[Source: nseindia.com]*Data updated as of June 27, 2024.**QTD, YTD, and 1-year returns are absolute returns. Returns for greater than one year are CAGR returns.#QTD:  Quarter to Date; YTD: Year to Date.

NIFTY Alpha 50 Index Statistics

Statistics# 1-Year  5 Years Since Inception
Standard Deviation** 17.69% 21.64 24.94%
Beta (NIFTY 50) 1.10 0.90 0.96
Correlation (NIFTY 50) 0.63 0.79 0.83

[Source: nseindia.com] *Data updated as of June 27, 2024. **Annualised daily average standard deviation. #Statistics data is based on the Price Return Index.

Is it Smart to Invest in the NIFTY Alpha 50 Index Benchmark?

The NIFTY Alpha 50 Index can be a smart investment option for investors looking for growth, diversification, and exposure to high-growth companies. 

  • High Returns: The NIFTY Alpha 50 Index funds have achieved high returns since its inception, delivering returns of 21.47%. This might be attractive for investors seeking higher returns than traditional index funds.

  • High-Growth Potential: The NIFTY Alpha 50 Index targets stocks with a history of outperforming the market (high alpha). This offers the chance for potentially superior returns compared to broader market funds.

  • Diversification: The Alpha 50 index invests in 50 different companies across various sectors, reducing risk compared to concentrated holdings.

  • Passive Management: It lowers fees compared to actively managed funds as it tracks an index.

  • Automatic Rebalancing: The index ensures the fund stays aligned with the high-alpha strategy as the index rebalances periodically.

  • Transparency: The holdings and weightage of the Nifty Alpha index funds are publicly available.

NIFTY Alpha 50 Index Fundamentals

P/E* P/B** Dividend Yield 
29.95 5.42 0.66

*P/E: Price-to-Earnings Ratio **P/B: Price-to-Book Ratio *Data updated as of June 27, 2024.

NIFTY Alpha 50 Index Methodology

The NIFTY Alpha 50 Index is a benchmark index designed to reflect the performance of select companies within the Indian stock market. Its methodology follows strict criteria for the selection of constituent stocks, index rebalancing, and governance.

  1. Eligibility Criteria for Selection of Constituent Stocks:

    • Capitalization and Turnover Criteria: Companies must rank in the top 300 by average free-float market capitalization and daily turnover over the past six months.

    • Listing History Requirement: Companies need at least one year of listing history.

    • Trading Frequency: Companies must have traded on every trading day in the past year.

    • Alpha Calculation: Calculate alpha for eligible securities using trailing one-year prices adjusted for corporate actions. Rank them in descending order based on alpha.

    • Final Selection Process: Select the top 50 companies based on their alpha values, prioritizing those with positive alpha. If none have positive alpha, select the highest alpha from a replacement pool.

  2. Index Rebalancing:

    • Review Schedule: The Alpha 50 index is reviewed every six months, using data up to the last trading day of February, May, August, and November.

    • Purpose of Review: The review aims to maintain the relevance of the Nifty Alpha 50 Index by reflecting current market conditions and the performance of eligible securities.

  3. Index Governance:

    The NIFTY Alpha 50 Index is governed by a professional team responsible for managing all NSE indices. The governance structure consists of:

    • Board of Directors: The Board of Directors of NSE Indices Limited oversees the overall governance of the index.

    • Index Advisory Committee (Equity): This committee provides guidance and recommendations regarding index composition, methodology, and other relevant aspects.

    • Index Maintenance Sub-Committee: Responsible for the day-to-day maintenance and management of the index, ensuring adherence to the defined methodology and criteria.

Plans having the NIFTY Alpha 50 Index as a Benchmark

  1. Max Life Nifty Alpha 50 Index Fund 

    The Max Life NIFTY Alpha 50 Index Fund is an addition to the market-linked funds by Max Life Insurance, designed to capitalize on high-growth potential mid-cap stocks.

    This fund aims to measure the performance of securities listed on the NSE with high alphas. It is a well-diversified 50-stock index. In order to make the 50 stock index investable and replicable, criteria such as liquidity and market capitalization are applied while selecting securities.

  2. Aditya Birla Sun Life Insurance Nifty Alpha 50 Index Fund

    ABSLI Nifty Alpha 50 Fund is a newly launched New Fund Offering (NFO) by Aditya Birla Sun Life Insurance Company. The new ABSLI NFO is available for subscription from June 16 to June 30, 2024. 

    The Aditya Birla Nifty Alpha 50 Index Fund aims to invest in the top 50 stocks of the Nifty Alpha 50 Index that consistently outperform market benchmarks. The fund focuses on timely exits from investments as returns begin to decline.

  3. Bajaj Allianz Life Nifty Alpha 50 Index Fund

    Bajaj Allianz Life Nifty Alpha 50 Index Fund is an open-ended NFO available from 1st to 15th July 2024. The fund is designed to replicate the performance of the Nifty Alpha 50 Index, which comprises 50 stocks selected for their high alpha values among the top 300 listed on the NSE. It offers you a passive investment strategy with a minimum monthly investment of Rs. 2,000. 

    The Bajaj Allianz Nifty Alpha Fudn aims to provide returns similar to the NIFTY Alpha 50 index, which has averaged 26.4% annually over the past decade. It appeals to long-term, cost-conscious investors seeking potential tax benefits under Section 80C and 10(10D), and features quarterly rebalancing to optimize performance across market conditions.

How to Invest in NIFTY Alpha 50 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 personalized plan benefits.

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

Step 3: Compare various investment plans using criteria like their performance, ratings, and other relevant information.

Step 4: Select from a range of insurers such as ABSLI, HDFC, ICICI, Max Life, and more to take advantage of the NIFTY Alpha 50 Index Fund.

Step 5: Select "Invest Now" and proceed by following the prompts displayed on the screen to finalize 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 is the alpha of Nifty 50?

    Alpha is a measure of a specific investment's performance compared to a benchmark like the Nifty 50 index. The Nifty Alpha 50 index, however, tracks stocks with high alpha over the past year.
  • When was the Nifty Alpha 50 index inception date?

    The Nifty Alpha index benchmark was launched on November 19, 2012, with a base date of December 31, 2003.
  • How are the stocks in the Nifty Alpha 50 chosen?

    The Nifty Alpha 50 index constituents are reviewed and rebalanced quarterly. The index selects the 50 stocks with the highest alpha scores calculated over the past year from the top 300 NSE-listed companies.
  • What are the benefits of investing in the Nifty Alpha 50?

    The Nifty Alpha 50 offers the potential for higher returns compared to broader market indices by focusing on historically outperforming stocks.
  • Are there any risks associated with the Nifty Alpha 50?

    Past performance is not indicative of future results. Alpha-based strategies can be volatile, and there is no guarantee these stocks will continue to outperform.
  • How can I invest in the Nifty Alpha 50?

    You cannot directly invest in the Nifty Alpha 50 itself. However, you can gain exposure through market-linked investment plans, capital guarantee plans, child plans, pension plans, exchange-traded funds (ETFs), or mutual funds that track the index.
  • How does the Nifty Alpha 50 differ from the Nifty 50?

    The Nifty 50 tracks the performance of the 50 largest companies in India, while the Nifty Alpha 50 focuses on 50 companies with high alpha regardless of capitalization size.
  • How often is the Nifty Alpha 50 rebalanced?

    The Nifty Alpha 50 is rebalanced quarterly to ensure the holdings reflect the latest alpha scores and market capitalization.
  • 9How to buy NIFTY alpha 50?

    You can buy the NIFTY Alpha 50 Index Fund through Policybazaar; just follow the steps mentioned below:
    • Visit the Policybazaar website or mobile app.

    • Navigate to the investment or mutual fund section.

    • Search for "NIFTY Alpha 50 Index Fund" or similar terms.

    • Compare the available options, including Bajaj Allianz Nifty Alpha 50 Index Fund.

    • Select the fund and proceed with the application process as guided on the platform.

  • What is NIFTY alpha 50 vs Momentum?

    NIFTY Alpha 50 Index and Momentum strategies are distinct in their objectives:
    • NIFTY Alpha 50 Index: This index comprises 50 stocks from the NIFTY 100 universe that are selected based on their alpha generation potential, aiming to outperform the broader market.

    • Momentum Strategy: Momentum investing focuses on buying securities that have shown recent positive price trends, expecting those trends to continue.

    While both seek to generate returns, NIFTY Alpha 50 emphasizes alpha generation through stock selection, whereas Momentum focuses on recent price trends.

  • What is the criteria for NIFTY alpha 50?

    The criteria for inclusion in the NIFTY Alpha 50 Index typically include:
    • Selection from the NIFTY 100 universe of stocks.

    • Emphasis on stocks demonstrating potential for alpha generation, often based on factors like fundamental strength, market capitalization, liquidity, and trading volumes.

    • Regular rebalancing to maintain the index's objectives and performance characteristics.

  • How is the Nifty Alpha 50 Index different from other indices?

    Unlike traditional market cap-weighted indices, the Nifty Alpha 50 Index selects stocks based on their alpha generation potential, aiming to capture higher returns.
  • Who manages the Nifty Alpha 50 Index?

    The index is managed by NSE Indices Limited, a subsidiary of the National Stock Exchange (NSE) of India.
  • What are the benefits of investing in the Nifty Alpha 50 Index?

    Investors can potentially benefit from higher returns compared to traditional indices by investing in stocks with strong alpha-generating characteristics.
  • Can individuals invest directly in the Nifty Alpha 50 Index?

    Typically, individual investors can invest indirectly through index-tracking market-linked funds, mutual funds or exchange-traded funds (ETFs) that replicate the index's performance. For Example: 
    • Bajaj Allianz Nifty Alpha 50 Index Fund

    • ABSLI Nifty Alpha 50 Fund

    • Max Life Nifty Alpha 50 Index Fund

    • ICICI Prudential Nifty Alpha Low-Volatility 30 Index Fund

    • ICICI Prudential Alpha Low Vol 30 ETF

    • Motilal Oswal Nifty Alpha 50 ETF

    • Reliance ETF Junior BeES

  • Which funds track the performance of the Nifty Alpha 50 index fund?

    A few of the market-linked funds that offer Nifty Alpha 50 Index Fund are as follows:
    • Max Life Nifty Alpha 50 Index Fund

    • Aditya Birla Sun Life Insurance Nifty Alpha 50 Fund

    • Bajaj Allianz Nifty Alpha 50 Index Fund

    • Bandhan Nifty Alpha 50 Index Fund

    • Kotak Nifty Alpha 50 ETF

*Past 5 Year annualised returns as on 01-07-2024
*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.
#The lumpsum benefit is calculated if policyholder invested ₹10000 monthly for 10 years in the fund with a policy term of 20 years. This Point To Point past performance data of last 10 years has been used to illustrate a scenario for the customers benefit. It is assumed that the past 10 years returns would have also been delivered in last 20 years. This is not guaranteed and not in anyway indicative of what the customer may actually get 20 years from now. The investment is subject to market risk and the risk is borne by the policyholder.

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