India’s Growth Story

Since the year 2000, India’s GDP has been exponentially on the rise.

Flourishing businesses, rising start-ups, and increasing talent came together to make India the 5th largest economy in the world in 2022.

What is the Nifty 500 index?

The Nifty 500 index captures the performance of the top 500 companies in the Indian stock market, including every entity from the Nifty 50, making it a barometer of the Indian stock market's overall performance.

It is a combination of its component indices - Nifty 50 Index, Nifty Next 50 Index, Nifty Midcap 150 Index, and Nifty Small Cap 250 Index.

  • Nifty 500 covers more than 90% of India’s listed equity universe
  • Nifty 50 covers just 51% of India's listed market

Nifty 500 index vs Nifty 50 index


India's Growth Potential

With India's economy getting ready to grow quickly in the next few years, investors have a chance to benefit from this growth. Because the Nifty 500 index fund includes more than 90% of India's listed market, it is a smart way to explore varied investment opportunities and be part of the country's expanding economy.


Optimal Balance of Returns

Over the last 2 decades, Nifty 50 has grown only by 23 times whereas Nifty 500 has grown by a whopping 30 times. Because of its exposure to smallcaps and midcaps, the Nifty 500 is expected to deliver better returns over the long-term.


Extensive Market Coverage

Over time, the Nifty 50 has included only a small chunk of India's total market value, currently accounting for slightly over 50%. But the Nifty 500 Index Fund, as mentioned above, covers more than 90% of all the companies listed in India; more like a bigger slice of the investing pie.



While Nifty 50 offers coverage to just 14 out of 21 sectors, the Nifty 500 offers coverage to all the 21 sectors. It is safe to say that it provides superior diversification at both the sector and stock levels, offering you a well-rounded portfolio.


Reduced Stock-Level Concentration

Unlike narrower indices focusing only on a few companies, the Nifty 500 Index Fund has spread out its investments to minimise the concentration. This way, if one company doesn't do well, it won't hurt the whole bunch.


Lesser long-term volatility

Over the long term, the Nifty 500 index reported the least volatility as compared to its component indices like Nifty 50 and Nifty Midcap 150, making it a reliable and steady investment avenue.

CharacteristicNifty 50Nifty 500
India's listed market-cap coverageLower (51%)Higher (92%)
Size CoverageLargecap onlyLarge, Mid, and Smallcaps
Sector-level DiversificationLower (Top 3 - 62%)Higher (Top 3 - 51%)
Stock-level DiversificationLower (Top 10 - 59%)Higher (Top 10 - 38%)
Long-term returnsLowerHigher
Long-term VolatilityHigherLower

Investing in the Nifty 500 index

An index fund based on Nifty 500 is a popular choice for those looking for broader market exposure, encapsulating the vastness and diversity of the Indian stock market.

This comprehensive coverage offers an opportunity to tap into the potential of not just the market leaders but also the rising stars. Unlike its Nifty 50 counterpart, investing in an index fund based on Nifty 500 allows investors to gain exposure across a wide array of sectors.

This includes not only the large-cap companies but also the mid and small-cap sectors which often hold significant growth potential.


What is the Nifty 500 Index?

How is the Nifty 500 Index constructed?

What is the significance of the Nifty 500 Index?

What are the advantages of investing in Nifty 500 Index?

How can I add Nifty 500 index to my portfolio?

Need help to understand Index Funds better?


An Investor Education Initiative

This publication is pursuant to Investor Awareness Initiative by Motilal Oswal Mutual Fund. This shall not be construed as offer to invest in any financial product or Scheme. The objective of this publication is restricted to informational purposes only.

“MOAMC Research & NSE (Data as of 29-Feb-2024; for period June 1999 to Feb 2024). Disclaimer: This publication is pursuant to Investor Education and Awareness Initiative by Motilal Oswal Mutual Fund. This shall not be construed as offer to invest in any financial product or Scheme. The objective of this publication is restricted to informational purposes only. All investors have to go through a one-time KYC (Know Your Customer) process. For further details on KYC, Change of address, phone number, bank details etc. list of SEBI registered Mutual Funds and redressal of complaints including details about SEBI SCORES portal, visit link, SMART ODR portal, visit link Investors should invest only with SEBI registered Mutual Funds details of which can be verified on the SEBI website under “SEBI Intermediaries/ Market Infrastructure Institutions.” This has been issued on the basis of internal data, publicly available information and other sources believed to be reliable. The information contained in this document is for general purposes only and not a complete disclosure of every material fact. The information/data herein alone is not sufficient and shouldn’t be used for the development or implementation of an investment strategy. It should not be construed as investment advice to any party the blog does not warrant the completeness or accuracy of the information and disclaims all liabilities, losses and damages arising out of the use of this information. Mutual Funds are subject to market risk. Read the offer documents before investing. Readers shall be fully responsible/liable for any investment decision taken on the basis of this article.”.

Mutual Fund investments are subject to market risks, read all scheme related documents carefully.