When it comes to choosing between Nifty and Sensex index funds, both have their merits. Let’s explore the key aspects to help you make an informed decision:
- Nifty Index Funds:
- Broad-Based: The Nifty 50 index represents the top 50 companies listed on the National Stock Exchange (NSE). It covers various sectors, providing diversification.
- Media Coverage: Nifty is widely followed by the media, making it accessible and popular among investors.
- Liquidity: Nifty stocks are actively traded, ensuring high liquidity.
- Similar Returns: Historically, there’s little difference in returns between Nifty and Sensex index funds.
- Sensex Index Funds:
- Focused on BSE: The Sensex tracks the performance of the 30 most actively traded stocks on the Bombay Stock Exchange (BSE).
- Overlapping Holdings: Interestingly, the Nifty includes all 30 Sensex companies, making them 86.67% identical in terms of portfolio composition.
- Consistent Returns: Rolling returns show that both indices perform similarly over time