Nifty Alpha 50

Nifty Alpha 50

The Nifty Alpha 50 Index seeks to assess the performance of equities listed on the NSE with high alphas. This is a diverse 50-stock index. To ensure the 50 stock index is investable and replicable, securities are selected based on liquidity and market capitalization requirements.

The weights of the securities in the index are determined by their alpha values; that is, the highest weight goes to the asset with the highest alpha in the index.

The Nifty Alpha 50 Index fund equities are used for benchmarking fund portfolios, launching index funds and exchange-traded funds, and organizing products, among other uses.

Eligibility Criteria to Select Nifty Alpha 50 stocks Index

The index seeks to evaluate the performance of high-Alpha securities listed on the NSE. When choosing securities, the 50 stocks index is subject to many criteria, including turnover and market size, to ensure its investability and replication.The alpha values are used to establish the weights of the equities in the index.The most weighted security in the index is the one with the highest alpha. The selection of the Nifty Alpha 50 stocks index is based on the following parameters:

• Companies with their headquarters situated in India are eligible to be included in the Nifty indices by the National Stock Exchange (NSE).
• The Nifty indices do not contain convertible stock, bonds, warrants, rights, or preferred stock that has guaranteed set returns. Furthermore, stocks classified as BZ series and suspended are excluded.
• Companies must be in the top 300 based on average free-float market capitalization and daily turnover for the six months ending in February, May, August, and November.
• The company should have a listing history of one year.
• During index reconstitution, a company that has undergone a scheme of arrangement for a corporate event, such as demerger or capital restructuring, is eligible for inclusion if it has completed twelve calendar months of trading as of the cut-off date after the stock has traded on an ex. basis and meets all eligibility criteria.
• The company's trading frequency should have been 100% throughout the last year.
• Alphas for qualifying securities are determined using 1-year trailing prices (adjusted for corporate actions) and sorted in descending order.
• The index includes the top fifty securities with the highest alphas.
• To reduce scripts replacements in the index, apply a 100% buffer during each review. If the existing element ranks inside the top 100 during the review, it can be kept in the index.
• Scripts with a negative alpha are not considered for selection.If no scrip with positive alpha is included in the eligible pool, then existing constituents with negative alpha will remain in the index.

Index Rebalancing

The index review is carried out using data from the six-month period concluding on the last trading day of February, May, August, and November, in that order.

Index Governance

A team of qualified individuals is in charge of all NSE indices.The Index Maintenance Sub-Committee, the Index Advisory Committee (Equity), and the Board of Directors of NSE Indices Limited are the three tiers of the governance hierarchy.

You may examine the Nifty Alpha 50 share price on BlinkX for further details.