It Is Not Your Father’s NIFTY

Here’s something to keep in mind while using historical index returns to draw conclusions about the future: the composition of the index keeps changing. The shifting effects of industry dynamics and market cycles should not be ignored.

NIFTY 50 in 2009:
NIFTY 50 sector weights in 2009

NIFTY 50 in 2019 (10 years later):
NIFTY 50 sector weights in 2019

Banks and financials now have a bigger impact on index performance. If you are looking for a more diversified exposure, the NEXT 50 is a better option:
NEXT 50 sector weights in 2019

Code and charts on github.

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