Imagine you are planning a meal. Would you prefer a plate with just a few premium dishes or a buffet that offers a variety of flavours? Investing in the stock market is similar.
Nifty 50 is a focused, stable portfolio, which includes only the biggest companies whereas the Nifty Total Market Index is more diverse, offering exposure to 750 stocks across large, mid, small, and even micro-cap companies. Both options have their strengths, but which one is better? Let’s break it down in simple terms and help you decide.
The Nifty 50 consists of the 50 biggest companies listed on the National Stock Exchange. These are well-established businesses with strong market positions, making the index more stable and less risky.
The Nifty Total Market Index is a broader index covering 750 companies across different market segments, including large, mid, small, and micro-cap stocks. Since it includes more companies, it offers greater diversification, which can help manage risk while also providing opportunities for higher growth.
Angel One Mutual Fund has launched two new funds that make it easier for investors to get exposure to the Nifty Total Market Index:
These funds provide exposure to 93% of total market capitalisation in a single investment. The new fund offer opened on February 10, 2025, and closes on February 21, 2025, and allows investors to benefit from a diversified index.
Here is a look at how both indices have performed as of 12th February 2024:
| Index | 1-Year Return | 3-Year CAGR | 5-Year CAGR | 10-Year CAGR |
| Nifty 50 | 7.99% | 11.23% | 14.93% | 11.59% |
| Nifty Total Market Index | 7.41% | 13.56% | 17.49% | 12.89% |
| Type of Investor | Suitability | Why? |
| Beginner or Conservative Investor | Nifty 50 | More stable and less risky, ideal for those new to investing |
| Long-Term Investor | Nifty Total Market Index | Higher returns over time due to the inclusion of mid and small-cap stocks |
| Investor Who Prefers Diversification | Nifty Total Market Index | Covers all market segments, reducing the impact of any single sector’s downturn |
| Risk-Averse Investor | Nifty 50 | Less affected by market volatility compared to an index with smaller stocks |
| Aggressive Investor | Nifty Total Market Index | Includes high-growth small and mid-cap stocks, which can provide higher returns but come with more risk |
Note: This table is for informational purposes only and is not a recommendation. Readers should decide based on their financial and risk profiles before choosing between the indices.
Choosing between the Nifty 50 and the Nifty Total Market Index is like deciding between a trusted, time-tested road and an exciting, scenic route with more opportunities. If you prefer stability, lower risk, and proven performers, you may consider Nifty 50.
But if you are willing to explore beyond the biggest companies and aim for higher long-term growth, the Nifty Total Market Index can be a good option.
Your investment choice should reflect your financial goals, risk appetite, and investment horizon. No matter which index you choose, the key to success is staying invested and letting time and compounding do their magic.
Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.
Investments in the securities market are subject to market risks, read all the related documents carefully before investing.
Published on: Feb 13, 2025, 2:54 PM IST
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