Nifty 500 beats key global indices over last 10 years; midcap outperforms smallcap, largecap indices: Motilal Oswal AMC
The Nifty 500 Index emerged as one of the top-performing global indexes over the past decade. Midcap index outperformed small-cap and largecap indices.
According to a study conducted by Motilal Oswal Asset Management Company (AMC), the Nifty 500 Index emerged as one of the top-performing global indexes over the past decade, delivering a return of approximately 16 per cent from December 31, 2013, to December 31, 2023.
In a report on Tuesday, March 12, Motilal Oswal AMC pointed out that the Nifty 500 index outperformed most of the world’s leading indices except the Nasdaq 100 over the last 10 years, which recorded a total return of 21.5 per cent as of December 31, 2023.
In comparison, the S&P 500, MSCI Emerging Markets, and MSCI EAFE (Developed Markets excluding-US) have demonstrated growth rates of 15.4 per cent, 6.1 per cent, and 7.9 per cent, respectively, during the same period, said the asset management company.
Notably, in the previous decade (2003-2013), the Nifty 500 index generated a return of about 14 per cent, slightly lagging behind the 15 per cent return of the MSCI Emerging Markets index during the period.
Midcap index outperformed smallcap, largecap indices
Among large, mid and smallcaps, the Nifty Midcap 100 index noted the highest total returns of 20.3 per cent, followed by the Nifty Smallcap 100 (17.3 per cent) and the Nifty 50 index (14.6 per cent) during 2013-2023. Over the 10 years ending during 2003-2013, the Nifty 50, Nifty Midcap 100 and Nifty Smallcap 100 noted similar total returns ranging between 14-15 per cent, said the AMC.
The study of Motilal Oswal AMC highlighted that the energy, IT, and financial were the best-performing sectors, over the last 10 years as of December 2023.
The energy sector topped the chart with 17.8 per cent growth followed by financial service and IT generating, 17.2 per cent and 16.3 per cent, respectively, in the same period, according to Motilal Oswal AMC.
During 2003-2013, FMCG (21.8 per cent), auto (20.1 per cent), and financial services (18.5 per cent) were the top three performing sectors. It is interesting to note that the major uptick in these sectors was seen during 2008-2013 on account of recovery from the global financial crises, the AMC underscored.
Pratik Oswal, Head of Passive Funds, Motilal Oswal AMC underscored that the Nifty 500 index is an optimal choice for investors keen on capitalising on India's robust growth narrative.
“Over the past decade, India has ascended from the 10th to the fifth position in the global economy. Projections from industry experts indicate a further climb in rankings by 2030. Investors keen on capitalising on India's robust growth narrative may find value in considering an investment in a comprehensive passive fund,” said Oswal.
“The Nifty 500 Index stands out as an optimal choice, providing extensive exposure to Indian equities with over 90 per cent market capitalisation coverage. Boasting a well-balanced representation across large, mid, and small-cap segments, this index demonstrates a robust diversification in both individual stocks and sectoral allocations. The Nifty 500 has demonstrated a tendency to outperform the Nifty 50 during bullish market phases, while offering a degree of resilience against downturns, particularly in comparison to mid and small-caps,” said Oswal.
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