The Nifty500 Momentum 50 is a strategy index developed by NSE Indices. Unlike a broad market index, it does not simply include the largest companies. Instead, it selects 50 stocks from the Nifty 500 universe based on their Normalized Momentum Score, which is calculated using six-month and twelve-month price returns adjusted for volatility. The selected stocks are then weighted using a combination of their Normalized Momentum Score and free float market capitalisation.
The index focuses on stocks that have shown relatively stronger price momentum over a specific period instead of trying to represent the overall market. This makes it a factor-based index rather than a broad market benchmark.
Table of Contents
This article explains how the Nifty500 Momentum 50 Index works, its key features, potential benefits and risks, and how it differs from broader market indices such as the Nifty 50 and Nifty 500.
What is Nifty500 momentum 50?
The Nifty500 Momentum 50 Index is a strategy index developed by NSE Indices. It aims to track the performance of 50 companies selected from the Nifty 500 universe based on their Normalized Momentum Score.
Momentum refers to the recent price strength of a stock. For this index, the momentum score is calculated using a stock’s six-month and twelve-month price returns after adjusting for volatility. This means the index considers not only stocks that have shown relatively stronger price performance, but also the level of volatility in those returns.
The index was launched by NSE Indices on June 4, 2024. Its base date is April 1, 2005, and its base value is 1,000.
Unlike a broad market index that aims to represent a larger segment of the market, the Nifty500 Momentum 50 focuses on stocks that have shown relatively stronger momentum based on a predefined methodology. The weight of each stock is determined using a combination of its Normalized Momentum Score and free-float market capitalisation.
The index may be used as a benchmark for fund portfolios and for launching index funds, exchange-traded funds (ETFs) and other index-linked products.
How does the Nifty500 Momentum 50 Index work?
The Nifty500 Momentum 50 Index follows a rules-based methodology to identify stocks that have shown relatively stronger price momentum. It measures momentum using a stock’s six-month and twelve-month price returns after adjusting for volatility. Both time periods are given equal importance while calculating the final Normalized Momentum Score.
Before selecting stocks, NSE Indices applies predefined eligibility criteria to the companies in the Nifty 500 universe. Based on the resulting Normalized Momentum Scores, the 50 highest-ranking stocks are included in the index.
The weight of each stock is determined using a combination of its Normalized Momentum Score and free-float market capitalisation. Individual stock weights are also capped according to the methodology prescribed by NSE Indices to avoid excessive concentration in a single stock.
The index is rebalanced and reconstituted twice a year, in June and December, using data as of the last trading day of May and November, respectively. This periodic review allows the index composition to be updated in line with its predefined methodology.
Key features of Nifty500 Momentum 50
The Nifty500 Momentum 50 Index has a few defining features that help explain how it is built and where it may be used:
50 stocks from the Nifty 500 universe
The index includes 50 stocks selected from the broader Nifty 500 universe based on the index methodology.
Momentum-based selection
Stocks are selected using six-month and twelve-month price returns, adjusted for volatility.
Tilt-weighted methodology
The index gives weight to stocks based on a combination of their momentum score and free-float market capitalisation.
Real-time calculation
The index is calculated on a real-time basis during market hours, helping investors track its movement through the trading day.
Benchmarking use
The index may be used as a benchmark for index funds, exchange-traded funds (ETFs) and other index-linked products.
Top stocks in Nifty500 Momentum 50 by weightage
The Nifty500 Momentum 50 Index assigns different weights to stocks based on its methodology, so higher-weighted stocks generally have a greater influence on the index:
| Company name | Weight (%) |
| Hindalco Industries Ltd. | 5.51 |
| BSE Ltd. | 4.85 |
| Eicher Motors Ltd. | 4.74 |
| Shriram Finance Ltd. | 4.7 |
| Asian Paints Ltd. | 4.49 |
| Bajaj Finance Ltd. | 4.45 |
| Bharti Airtel Ltd. | 4.26 |
| Mahindra & Mahindra Ltd. | 4.12 |
| Maruti Suzuki India Ltd. | 3.88 |
| Multi Commodity Exchange of India Ltd. | 3.29 |
Please note that the reference to any industry/sector/stock is provided for illustrative purposes only. This should not be construed as a research report or a recommendation to buy or sell any security or sector.
Source: NSE Indices, Nifty500 Momentum 50 Factsheet, data as of May 29, 2026.
Sector allocation of Nifty500 Momentum 50
The Nifty500 Momentum 50 Index is spread across multiple sectors, but the weight of each sector can vary based on the stocks selected through the index methodology:
| Sector | Weight (%) |
| Financial Services | 42.33 |
| Automobile and Auto Components | 19.67 |
| Capital Goods | 7.58 |
| Healthcare | 6.85 |
| Metals & Mining | 5.7 |
| Consumer Durables | 4.49 |
| Services | 4.26 |
| Telecommunication | 4.26 |
| Chemicals | 2.43 |
| Consumer Services | 1.57 |
| Fast Moving Consumer Goods | 0.85 |
Please note that the reference to any industry/sector/stock is provided for illustrative purposes only. This should not be construed as a research report or a recommendation to buy or sell any security or sector.
Source: NSE Indices, Nifty500 Momentum 50 Factsheet, data as of May 29, 2026.
Historical performance of the Nifty500 Momentum 50 Index
The table below shows the historical performance of the Nifty500 Momentum 50 Index across different time periods:
| Return period | Price Return (%) | Total Return (%) |
| Quarter-to-date (QTD) | 15.39 | 15.44 |
| Year-to-date (YTD) | 0.67 | 0.82 |
| 1 Year | 1.15 | 1.46 |
| 5 Years | 15.96 | 16.70 |
| Since inception | 20.63 | 21.72 |
Past performance may or may not be sustained in future.
Source: NSE Indices, Nifty500 Momentum 50 Factsheet, data as of May 29, 2026.
Benefits of investing in Nifty500 Momentum 50
The Nifty500 Momentum 50 Index may offer certain benefits for investors who understand factor-based investing and equity market risks:
Rules-based approach
The index follows a predefined methodology, which means stock selection is based on set rules rather than individual opinions.
Exposure to momentum as a factor
It gives investors exposure to stocks that have shown relatively stronger price trends over a defined period.
Broader stock universe
Since the index selects stocks from the Nifty 500 universe, it looks beyond only large-cap companies in the Nifty 50.
Volatility-adjusted selection
The methodology considers both price returns and volatility, rather than relying only on recent price performance.
Passive investment use
Funds tracking this index aim to replicate its composition, subject to tracking error, and provide exposure to a transparent index-based strategy.
Risks associated with momentum investing
Momentum-based investing can behave differently from broader market indices, so investors should understand the key risks before considering it:
- Momentum strategies depend on market trends continuing, and they may underperform if market leadership changes quickly.
- Since the index holds only 50 stocks, it may be less diversified than broader indices such as the Nifty 500.
- As a factor-based index, its performance may differ significantly from broad market indices during different market phases.
- Funds tracking the index may have tracking error, which means the fund’s returns may not exactly match the index returns.
- ETFs trade on stock exchanges like shares, so investors may incur brokerage charges, demat-related costs and liquidity-related risks.
- Investors should review the scheme’s Riskometer, as it helps indicate the risk level of a mutual fund scheme.
Nifty500 Momentum 50 vs Nifty 50
The Nifty500 Momentum 50 and Nifty 50 both include 50 stocks, but they are built for different purposes:
| Parameter | Nifty500 Momentum 50 | Nifty 50 |
| Type of index | A factor-based strategy index that focuses on momentum | A broad market index that represents 50 large companies |
| Stock universe | Selects stocks from the Nifty 500 universe | Selects large-cap companies from major sectors of the Indian economy |
| Selection method | Stocks are selected based on their Normalized Momentum Scores | Stocks are selected based on eligibility criteria such as market capitalisation and liquidity |
| Weighting method | Stock weights are based on momentum score and free-float market capitalisation | Stock weights are based on free-float market capitalisation |
| Market exposure | Can include companies beyond only the largest names, depending on momentum | Mainly provides exposure to large, established companies |
| Risk profile | May be more volatile because it follows a factor-based approach | May be relatively more stable because it focuses on large-cap companies |
| Performance behaviour | Its performance may differ from broad market indices during different market phases | Its performance generally reflects the movement of India’s large-cap equity market |
| Investor relevance | May suit investors who understand momentum investing and higher equity risk | May suit investors looking for broad large-cap market exposure |
Nifty500 Momentum 50 vs Nifty 500
The Nifty500 Momentum 50 and Nifty 500 are linked, but they offer different types of market exposure:
| Parameter | Nifty500 Momentum 50 | Nifty 500 |
| Type of index | A factor-based strategy index that focuses on momentum | A broad market index that represents a large part of the Indian equity market |
| Number of stocks | Includes 50 stocks | Includes 500 stocks |
| Stock universe | Selects stocks from the Nifty 500 universe | Acts as the broader parent index |
| Selection method | Stocks are selected based on their Normalized Momentum Scores | Companies are selected based on NSE Indices’ eligibility criteria |
| Weighting method | Stock weights are based on momentum score and free-float market capitalisation | Stock weights are generally based on free-float market capitalisation |
| Market exposure | Provides focused exposure to stocks showing relatively stronger momentum | Provides broader exposure across large-cap, mid-cap and small-cap companies |
| Diversification | Less diversified because it holds only 50 stocks | More diversified because it holds 500 stocks |
| Risk profile | May be more volatile because it follows a focused, factor-based approach | May be relatively more diversified because it represents a wider market segment |
| Investor relevance | May suit investors who understand momentum investing and higher equity risk | May suit investors looking for broad market exposure through one index |
Who may consider investing in Nifty500 Momentum 50?
Funds tracking the Nifty500 Momentum 50 Index may be evaluated by investors who understand how equity markets and factor-based strategies can behave:
- Those familiar with momentum-based strategies and aware that they may underperform broader market indices at times.
- Individuals who already maintain a diversified portfolio and are exploring factor-based exposure as part of their overall investment approach.
- People with an appropriate risk appetite, investment horizon, and alignment with financial goals may consider evaluating such funds.
- A careful review of the Scheme Information Document, tracking error, expense ratio, liquidity, and portfolio overlap is essential before investing.
- It is important to read all scheme-related documents thoroughly prior to making any investment decision.
Conclusion
The Nifty500 Momentum 50 is not designed to represent the entire market. It is a rules-based factor index drawn from the Nifty 500 universe and built to capture stocks with relatively stronger momentum using a predefined methodology. For investors exploring momentum-based passive strategies, it can be a useful index to understand, but any investment decision should be based on one’s financial goals, risk appetite, investment horizon and a careful review of scheme-related documents.
FAQs
What is the Nifty500 Momentum 50 Index?
The Nifty500 Momentum 50 is a strategy index developed by NSE Indices that tracks 50 stocks selected from the Nifty 500 universe based on their Normalized Momentum Scores.
How does the Nifty500 Momentum 50 Index select stocks?
The index selects 50 stocks from the Nifty 500 universe using six-month and twelve-month price returns adjusted for volatility. Stock weights are then assigned based on a combination of the Normalized Momentum Score and free-float market capitalisation.
How often is the Nifty500 Momentum 50 Index rebalanced?
The index is rebalanced and reconstituted twice a year, in June and December, using data as of the last trading day of May and November, respectively.
What is momentum investing in the stock market?
Momentum investing is an investment approach that focuses on stocks that have shown relatively stronger recent price performance. In the Nifty500 Momentum 50 Index, momentum is measured using six-month and twelve-month price returns adjusted for volatility.
Is the Nifty500 Momentum 50 suitable for long-term investment?
It may be considered by long-term investors who understand factor investing, equity market volatility and the possibility of periods of underperformance. Suitability depends on an investor’s financial goals, risk appetite, investment horizon and overall portfolio allocation.
Can beginners invest in Nifty500 Momentum 50 funds?
Beginners may evaluate such funds after understanding equity market risks, factor investing, tracking error, costs and the index methodology. Investors should read all scheme-related documents carefully before investing.
What is the difference between the Nifty500 Momentum 50 and the Nifty 50?
The Nifty500 Momentum 50 is a factor-based strategy index that selects stocks based on momentum, whereas the Nifty 50 is a broad market index that represents 50 large-cap companies based on predefined eligibility criteria.
What is the return of Nifty 500 Momentum 50 Index Fund in the last 5 years?
As per the available index data, the Nifty500 Momentum 50 Index has shown a 5-year price return of 15.96% and a 5-year total return of 16.70%. Past performance may or may not be sustained in future.
Source: NSE Indices, Nifty500 Momentum 50 Factsheet, data as of May 29, 2026.
Which is better to invest in, Nifty 50 or Nifty500 Momentum 50?
The Nifty 50 may suit investors looking for broad large-cap exposure, while the Nifty500 Momentum 50 may suit investors who understand factor investing and are comfortable with higher volatility. The better choice depends on the investor’s goals, risk appetite and investment horizon.
