The NiFty Total Market Index: A Comprehensive Glimpse into India's Economic Landscape

According to Helios Capital, the fact that MSCI methodology also removes a company from its indices if it reaches foreign ownership limit is amusing as once a company reaches that point, foreign investors start selling stake in the company… the result, as ownership comes down, the MSCI ends up adding a company back into the index.

India's economic dynamism isn't merely reflected in the Indices of the National Stock Exchange, like the Nifty 50 and the Sensex. While these indices have become synonymous with the country's most prominent corporations, they capture just the tip of the iceberg of India's vast economic tapestry, isn’t it?

Beyond the large cap companies of India lies the potential of mid and small cap companies,. These entities, often overlooked, buzz with innovation and potential, seeking to add significant depth to India's growth story. While segmented indices like the Nifty Small Cap 100 and Mid Cap 100 seek to offer snapshots of these sectors, a comprehensive overview may be provided by the Nifty Total Market Index.

Launched in October 2021, with a history backtested to April 2005, the Nifty Total Market Index embraces 750 stocks from diverse market segments. *While the large-cap stocks form 72.1% of its index weightage, a significant 28.1% is carved out for the mid, small, and microcap sectors. This blend not only showcases the robustness of the established players but also shines a light on the growth potential of smaller entities.

Notably, the Nifty Total Market Index represents a staggering *96% of the NSE's total market capitalization, against the 49% covered by the Nifty50. Such expansive coverage offers investors a panoramic insight into India's stock market.

*Source : NSE data, as on August 31, 2023

From a historical standpoint, this index's performance may be inferred that it has outpaced the Nifty50 over intervals spanning 15, 10, 5, 3, and 1-year periods:

Analysis oF NiFty50 vs NiFty Total Market Index

Disclaimer: Past performance may or may not be sustained in future. All information contained is for illustration purposes only. The performance of the index shown does not in any manner indicate the performance of the scheme.

Source : NSE Data. As on September 06, 2023

Recently, Groww mutual fund has launched their first index fund based on the Nifty Total Market Index

India's economic narrative is multifaceted, with growth pulsating across various sectors over different periods. The Nifty Total Market Index aims to provide a more extensive look into India's economic landscape. For those looking to understand the broader contours of the Indian market, this index can be one of the essential reference points.

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

Moneycontrol journalists were not involved in the creation of the article.