NIFTY stands for National Stock Exchange Fifty and is the index for the National Stock Exchange. The NIFTY 50 is nothing now set a benchmark of Indian stock market index. that represents the weighted average of 50 of the largest Indian companies listed on the National Stock Exchange It is one of the two main stock indices used in India, the BSE SENSEX. The official NIFTY 50 Index was launched in 22 April 1996.

NIFTY is operator by NSE Indices. It represents 50 stocks that belongs to 23 different economical sectors. NIFTY maybe used for different purpose such as index funds, index-based derivatives and bench- marking funds portfolios. The Indian Index Services and products Ltd. own and manages NIFTY index.

NIFTY has emerged as the only financial product in India which has the largest ecosystem. This ecosystem comprises of onshore and offshore exchange traded funds, exchange traded futures and options that is weighted on capitalization from the day NIFTY has launched, it used capitalization as weight, assigning it to different constituents of the share market.

Now let’s understand how we can calculate Nifty 50? The Nifty 50 index is nothing but computed using the float adjusted market capitalization- weighted methodology. It is where the level of the index represents the total market value of the stocks, which is relative to a particular baseline period. If I talk about the composition of Nifty 50 then it gives a weightage of 39.47% to financial services, 15.31% to Energy, 13.01% to IT, 6.11% to Automobiles and 0% to the agriculture sector, 12.38% to consumer goods. Nifty 50 index is the free float market capitalisation weighted index.

If you focus on benefits then by investing in the Nifty 50 index, you get to invest in 50 leaders in their sectors. So you give yourself a great chance to accumulate enormous wealth in the long run. And investing in Nifty 50 Index can be more beneficial convenient, easy and cost- effective if you invest through index Mutual Funds. Through this whole article all I am trying to convey is if you are planning to generate long term wealth through index investing, you can choose to invest in the Nifty 50.