Nifty Alpha 50 Index

Factor-based investing, where stocks are selected based on style factors such as size, alpha, quality, value, momentum and low volatility, remains popular globally and continues to see rising interest in India as well.

NIFTY Alpha 50 is one of many strategy indices available in NSE and the index tracks the performance of 50 stocks with high Alphas in last one year. In order to make the 50 stocks index investible and replicable, criteria such as turnover and market capitalization are applied while selection of securities. 

Weights of securities in the index are assigned based on the alpha values. Security with highest alpha in the index gets highest weight.
Index Construction & Review Methodology:
Calculation Methodology:
Companies must rank within the top 300 companies by average free-float market capitalization.
The index is constructed using divisor methodology where weights are assigned based on alpha values of the securities. 
Index Review frequency:
The review of NIFTY Alpha 50 index is undertaken on quarterly basis using data of six month period ending last trading day of February, May, August and November.

Sector Representation:


Top stocks by weightage:


Performance of Nifty Alpha 50 Index:


Nifty 50 vs Nifty Alpha 50 performance:

image NSE India

As you can see, the Nifty Alpha 50 Index has outperformed Nifty 50 by a wide margin. This index is volatile and may have high drawdowns during bearish markets. This is suitable for investors with high risk appetite.

Smart Beta based passive investment styles are increasingly being used by investors across the globe as building blocks in their asset allocation models in their eternal quest to generate market beating returns.

Kotak AMC has come out with an ETF for this index.