Nifty 500 Multicap 50:25:25

NIFTY 500 Multicap 50:25:25 Index

All the companies that make up the Nifty 500 index are included in the Nifty 500 Multicap 50: 25: 25 index fund. In the Nifty 500 Multicap 50:25:25 index, the total weight to each of these three size segments—Large, Mid, and Small cap—is fixed at 50%, 25%, and 25%, respectively, at every quarterly rebalance date. This is in contrast to the Nifty 500 index, where the total weight of each size segment is based on the total free float market capitalisation of all stocks falling within that size segment. The three segments' respective weights of 50%, 25%, and 25% are distributed among the stocks within each segment according to the free float market capitalisations of the underlying equities. Weight of each size segment may be different from its respective capped level between two rebalance dates due to price drift of underlying stocks. 

History of NIFTY500 Multicap 50:25:25 index

On December 2, 2020, the NIFTY 500 Multicap index was introduced. Its base date was April 1, 2005, and its base value was 1000. Since its launch, the share price of the NIFTY500 Multicap 50:25:25 has surpassed 9,000 at ~20x P/E multiples. It is reconfigured every six months, and the weights are adjusted every three months.

Sector Wise Distribution of NIFTY500 Multicap 50:25:25 index

Financial Services, IT, Oil, Gas & Consumable Fuels, Capital Goods, FMCG, Healthcare, Automobile & Auto Components, Consumer Durables, Chemicals, Power, Metals & Mining, Services, Construction, Telecom, Construction Materials, Realty, Media, Entertainment & Publication are just a few of the 21 economic sectors that are represented by these stocks. 

How is NIFTY500 Multicap 50:25:25 Calculated?

The 501 stocks in the NIFTY500 Multicap 50:25:25 share price are weighted based on a regularly capped free-float market capitalisation in relation to a specific base market capitalization value in real-time. 

The index value is calculated as follows -

Index value = Current market capitalisation/ (Base market capitalisation * Base Index Value)

How Are Stocks Selected for Inclusion in NIFTY500 Multicap 50:25:25?

To be eligible for inclusion in NIFTY500 Multicap 50:25:25, the companies need to meet the following requirements: 

• The National Stock Exchange should list it.
• It should always be included in the NIFTY 500 index.
• Every quarter, the weightage of large-cap stocks from NIFTY 100 should be capped at 50%, mid-cap stocks from NIFTY Midcap 150 at 25%, and small-cap stocks from NIFTY Smallcap 250 at 25%.
• Companies should use the float-adjusted market capitalisation value of each stock in its corresponding size segment as the basis for weighting.
• Based on T-3 closing prices, the index weights are rebalanced quarterly in the months of March, June, September, and December.

Should you Invest in the NIFTY500 Multicap 50:25:25 index?

Since its launch, the NIFTY500 Multicap 50:25:25 index has returned a total of 14.88%, and over the last five years, it has returned 10.76%. The index is not very volatile and has modest beta levels.