Nifty 50 vs Nifty Subsequent 50 vs Nifty Issue Indices (Alpha, Momentum, Worth, High quality, Low Volatility) (2022)

Nifty 200 Momentum 30 and Nifty Alpha 50 indices have given one of the best returns. Low Volatility and High quality indices are the least unstable and submit one of the best risk-adjusted metrics.

I’ve in contrast the efficiency of issue indices in earlier posts, however I’ve by no means in contrast all of them in a single submit. Together with outstanding cap-based indices. On this submit, I examine the next:

1. 4 Market cap-based indices: Nifty 50, Nifty Subsequent 50, Nifty Midcap 150, Nifty Smallcap 250
2. Alpha: Nifty Alpha 50
3. Worth: Nifty 50 Worth 20 (NV20), Nifty 500 Worth 50
4. High quality: Nifty 200 High quality 30, Nifty Midcap 150 High quality 50
5. Low Volatility: Nifty 100 Low Volatility 30
6. Momentum: Nifty 200 Momentum 30
7. Multi-factor index: Nifty Alpha Low Volatility 30

12 indices in complete. 4 cap-based and eight issue indices. I’ve written about lots of the following indices earlier than too.

1. Nifty 50 TRI
2. Nifty Subsequent 50 TRI (Evaluate 1) (Evaluate 2)
3. Nifty Midcap 150  
4. Nifty Smallcap 250
5. Nifty 200 Momentum 30 (Evaluate 1) (Evaluate 2)
6. Nifty 200 High quality 30 (Evaluate)
7. Nifty Alpha 50 (Evaluate)
8. Nifty 100 Low Volatility 30 (Evaluate 1) (Evaluate 2)
9. Nifty Alpha Low Volatility 30 (Evaluate 1) (Evaluate 2)
10. Nifty 50 Worth 20 Index (NV20) (Evaluate)
11. Nifty 500 Worth 50
12. Nifty Midcap 150 High quality 50 (Evaluate 1) (Evaluate 2)

I exploit the information from April 1, 2005, till March 31, 2022. For Nifty Alpha Low Vol 30 index, the Whole returns index (TRI) knowledge was not simply downloadable from NiftyIndices web site. Therefore, I’ve used value returns knowledge for the index. Have used TRI for different indices.

Nifty Issue Indices (Nifty Technique Indices): Calendar 12 months Efficiency

Allow us to begin with calendar 12 months returns.

Nifty Issue Indices (Nifty Technique Indices): 5-year Efficiency

Nifty Issue Indices (Nifty Technique Indices): CAGR, Rolling Returns, Sharpe Ratios

April 1, 2005 – March 31, 2022

The information for Nifty 50 Worth 20 index is just from January 1, 2009. For different indices, the information is from April 1, 2005. Within the earlier chart, the efficiency metrics (CAGR, Sharpe ratios, drawdowns) are favourably affected (since market meltdown resulting from international monetary disaster is just not thought of for NV20). Not honest to different indices. Within the chart beneath, I recalculate the efficiency metrics from January 1, 2009-March 31, 2022.

January 1, 2009 – March 31, 2022

How do you utilize this data?

No funding technique, regardless of how good, works on a regular basis. No funding technique, regardless of how dangerous, fails on a regular basis.

Every technique goes by ups and downs and can check your endurance. When you decide an funding technique (issue index) merely based mostly on previous efficiency (and with out conviction), it’s possible you’ll soar the ship on the incorrect time.

About learn how to use this data in your portfolio, I’ve written two posts lately.

Tips on how to construct a long-term portfolio? If you wish to spend money on issue indices, these might be a part of your satellite tv for pc fairness portfolio.

One other submit (Tips on how to assemble “the Greatest portfolio” utilizing index funds and ETFs?) discusses learn how to optimize your portfolio for numerous efficiency metrics (excessive CAGR, low customary deviation, excessive Sharpe ratios, low drawdowns). Deal with the metric that appeals to you essentially the most. Use the indices/ETFs that rank one of the best on these metrics.

Just a few caveats

1. The efficiency of many issue indices seems to be tremendous spectacular. Nonetheless, previous efficiency doesn’t assure future efficiency.
2. Whereas I’ve thought of the information from April 1, 2005, many of those issue indices had been launched a lot later. Therefore, the outperformance by these issue indices might merely be a results of back-fitting. Efficiency on stay knowledge might transform underwhelming.
3. For efficiency metrics, the outcomes will fluctuate based mostly on time-period thought of. In actual fact, you possibly can see that the outcomes are completely different for (April 1, 2005-March 31, 2022) and (January 1, 2009-March 31,2022) knowledge.
4. Alpha (extra returns) from an funding technique can shrink if severe cash chases the technique. As an illustration, for a few of the methods/issue indices, the index funds/ETFs have been launched very lately.

Supply/Extra Hyperlinks

NiftyIndices

Nifty Indices: Methodology