Nifty 500, India's broadest index, outperformed most of the world's leading indices except the Nasdaq 100 over the last 10 years, according to the study by Motilal Oswal Asset Management Co.
FinTech BizNews Service
Mumbai, March 12, 2024: According to a comprehensive study by Motilal Oswal Asset Management Company (Motilal Oswal AMC) on historical market performance, the Nifty 500 has delivered impressive total returns of 16% (refer to Exhibit 1). Notably, this positions the Nifty 500 as one of the top-performing global indexes over the past decade, second only to the Nasdaq 100, which recorded a total return of 21.5% as of December 31, 2023. In comparison, the S&P 500, MSCI Emerging Markets, and MSCI EAFE (Developed Markets ex-US) have demonstrated growth rates of 15.4%, 6.1%, and 7.9%, respectively, during the same period.
Speaking on the study, Pratik Oswal, Head of Passive Funds, Motilal Oswal Asset Management Company Ltd said, “Over the past decade, India has ascended from the 10th to the 5th position in the global economy. Projections from industry experts indicate a further climb in rankings by 2030. Investors keen on capitalizing on India's robust growth narrative may find value in considering an investment in a comprehensive passive fund.” He further added “The Nifty 500 Index stands out as an optimal choice, providing extensive exposure to Indian equities with over 90% market capitalization coverage. Boasting a well-balanced representation across large-, mid-, and small-cap segments, this index demonstrates a robust diversification in both individual stocks and sectoral allocations. Notably, the Nifty 500 has demonstrated a tendency to outperform the Nifty 50 during bullish market phases, while also offering a degree of resilience against downturns, particularly in comparison to mid and small-caps.”
Performance comparison with the world’s leading indices.
From | To | Data Label | Nifty 500 (India) | S&P 500 (USA) | NASDAQ 100 (Tech) | MSCI Emerging Mkt (EM) | MSCI EAFE (Dev mkt Ex-US) |
31-Dec-03 | 31-Dec-08 | 5 Yrs. | 10.3% | -1.0% | -2.2% | 9.3% | 3.3% |
31-Dec-08 | 31-Dec-13 | 5 Yrs. | 17.8% | 23.9% | 31.7% | 20.9% | 18.6% |
31-Dec-13 | 31-Dec-18 | 5 Yrs. | 14.6% | 11.2% | 16.1% | 4.5% | 3.5% |
31-Dec-18 | 31-Dec-23 | 5 Yrs. | 17.5% | 19.8% | 27.2% | 7.7% | 12.5% |
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31-Dec-03 | 31-Dec-13 | 10 Yrs. | 14.0% | 10.7% | 13.5% | 15.0% | 10.7% |
31-Dec-13 | 31-Dec-23 | 10 Yrs. | 16.0% | 15.4% | 21.5% | 6.1% | 7.9% |
Disclaimer - Data as of 31-Dec-2023, Source- MOAMC, NSE, Bloomberg, and FactSet. All benchmark performances are in INR total return.
Energy and Financials were best performing sectors over last 10 years (Dec 31 2013-2023) –
The study reveals (see exhibit 2) that the Energy, IT, and Financial were the best-performing sectors, over last 10 years as of Dec 2023. The energy topped the chart with 17.8% growth followed by Financial Service and IT generating, 17.2% and 16.3%, respectively. While, during 2003-2013, FMCG (21.8%), Auto (20.1%), and Financial Services (18.5%), were the top 3 performing sectors; it is interesting to note that the major uptick in these sectors was seen during the 2008-2013 on account of recovery from the global financial crises.
Performance comparison with Sectoral indices.
From | To | Data Label | Nifty 500 | Nifty Auto | Nifty Energy | Nifty Fin Service | Nifty IT | Nifty Pharma | Nifty Metal | Nifty FMCG |
31-Dec-03 | 31-Dec-08 | 5 Yrs. | 10.3% | 2.9% | 12.9% | 15.9% | -0.8% | 6.0% | 9.7% | 14.8% |
31-Dec-08 | 31-Dec-13 | 5 Yrs. | 17.8% | 40.0% | 7.7% | 21.1% | 36.0% | 27.6% | 13.2% | 29.3% |
31-Dec-13 | 31-Dec-18 | 5 Yrs. | 14.6% | 12.8% | 14.6% | 20.7% | 10.8% | 3.6% | 7.8% | 13.9% |
31-Dec-18 | 31-Dec-23 | 5 Yrs. | 17.5% | 16.4% | 21.2% | 13.9% | 22.1% | 14.5% | 22.5% | 15.2% |
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31-Dec-03 | 31-Dec-13 | 10 Yrs. | 14.0% | 20.1% | 10.2% | 18.5% | 16.1% | 16.3% | 11.5% | 21.8% |
31-Dec-13 | 31-Dec-23 | 10 Yrs. | 16.0% | 14.6% | 17.8% | 17.2% | 16.3% | 8.9% | 14.9% | 14.5% |
Pratik Oswal further added “The Motilal Oswal Nifty 500 Index Fund, has established a commendable track record spanning over four years, currently boasting a total Assets Under Management (AUM) of INR 674.61 crore as of January 31, 2024. Impressively, the fund maintains an exceptionally low tracking error of 0.04% (4 basis points), underscoring its commitment to closely aligning with the performance of the Nifty 500 Index.”
Midcap outperformed smallcap and largecap indices -
Among large, mid and small caps, the Nifty Midcap 100 Index noted highest total returns of 20.3% (refer exhibit 3) followed by Nifty Smallcap 100 (17.3%) and Nifty 50 Index (14.6%) during the 2013-2023. Over the 10 years ending during 2003-2013, the Nifty 50, Nifty Midcap 100 and Nifty Smallcap 100 noted similar total returns ranging between 14%-15%.
From | To | Data Label | Nifty 500 | Nifty 50 | Nifty Midcap 100 | Nifty Smallcap 100 |
31-Dec-03 | 31-Dec-08 | 5 Yrs. | 10.3% | 11.2% | 11.3% | 12.6% |
31-Dec-08 | 31-Dec-13 | 5 Yrs. | 17.8% | 17.7% | 18.3% | 16.6% |
31-Dec-13 | 31-Dec-18 | 5 Yrs. | 14.6% | 12.9% | 18.6% | 15.0% |
31-Dec-18 | 31-Dec-23 | 5 Yrs. | 17.5% | 16.2% | 22.0% | 19.8% |
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31-Dec-03 | 31-Dec-13 | 10 Yrs. | 14.0% | 14.4% | 14.8% | 14.6% |
31-Dec-13 | 31-Dec-23 | 10 Yrs. | 16.0% | 14.6% | 20.3% | 17.3% |
