How to invest in the NIFTY 50

Are you looking for an investment that allows you to benefit from one of the fastest-growing economies in the world?
Updated: Apr 23, 2022

Get started in minutes with our preferred broker, eToro.

10/10
68% of retail CFD accounts lose money
Visit site

In that case, India’s NIFTY 50 Index could be a great opportunity. There are many different ways to get exposure to a stock market index, so keep reading and we’ll take you through each available method to help you figure out how best to invest your money.

Where can I buy into the NIFTY 50 Index?

1
Min. Deposit
$ 10
Promotion
User Score
10
Up to $240 bonus!
Deposit with ACA, Wire, Pay with my bank
Invest for dividends and get payout on stocks on Ex-Dividend day
Start Trading
Payment Methods:
Bank Transfer, Wire Transfer
Full Regulations:
CySEC, FCA
Investoo Ltd is compensated if you access certain of the products or services offered by eToro USA LLC and/or eToro USA Securities Inc., as applicable. This compensation incentivizes Investoo Ltd to describe those products and services in favorable terms. Any testimonials contained in this communication may not be representative of the experience of other eToro customers and such testimonials are not guarantees of future performance or success.
2
Min. Deposit
$ 100
Promotion
User Score
10
Trade out-of-hours on over 70+ US stocks
Get exposure to a wide range of popular UK, US and international stocks
Enjoy flexible access to more than 17,000 global markets, with reliable execution
Start Trading
Payment Methods:
Bank Transfer, Credit Card, Debit Card, PayPal
Full Regulations:
ASIC, FCA, FINMA, is a licensed bank (IG Bank in Switzerland)
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 68% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money.
3
Min. Deposit
$ 0
Promotion
User Score
9.5
$0 commission and $0 Options contract fees
Upgraded research with advanced charts
Smart Menus for faster trades
Start Trading
Payment Methods:
Full Regulations:

What is the NIFTY 50?

The NIFTY 50 (short for National Index Fifty) is India’s benchmark stock market index. The NIFTY 50 consists of 50 blue-chip stocks from India, representing 13 different sectors within the Indian economy, including finance, automakers, pharmaceuticals, metals, and technology.

Is it a good investment?

That’s up to you, but it definitely can be. India was ranked among the worldwide leaders in national GDP growth before the COVID-19 pandemic hit in 2020, so a post-COVID landscape could send the NIFTY 50 off to the races again. Just remember that as with any stock market index, you’re much better off investing if the NIFTY 50 is looking set to rise in a bull market, as in bear market conditions all indices tend to see losses across the board. Learn more about bull and bear markets in our stock investment courses.

How do I invest in the NIFTY 50?

Here are three steps you should follow when NIFTY 50 Index investing. We’ve outlined each in more detail below.

  1. Choose an investment type
  2. Use our top tips to succeed
  3. Choose a platform to invest with

1. Choose investment type

The investment type you choose will depend on multiple factors, such as how much each approach will cost you in transaction fees, and how much investment advice you feel you need to succeed. The following is a rundown of some of the top methods that you can use:

ETFs

An ETF (exchange-traded fund) is an investment fund that you can also trade on a stock exchange during regular stock market hours, the same way individual stocks are. ETFs typically consist of a collection of assets such as bonds or commodities, but can also be structured to include all the stocks listed in the NIFTY 50 Index, therefore enabling you to make an investment that tracks the index’s level. A NIFTY 50 Index ETF gives you access to a large, diversified batch of stocks, and you get that privilege without having to pay high transaction or management fees.

Individual stocks

If you want to focus on the NIFTY 50 Index’s top-performing stocks, you can buy each stock in the index in the separate trades. This allows you to evaluate each stock, then sell to reduce your holdings until you own only the NIFTY 50’s top-performing stocks. 

The problem with this approach is that you’ll run up a lot of transaction fees making 50 separate trades to buy stocks, followed by even more costs when you want to sell. So unless you’re both very wealthy and have tons of time to kill, this approach likely won’t work for you.

Mutual funds

By definition, a mutual fund is an investment fund that’s run by a professional money manager. You can get a fund through a broker, or through the company that administers it. The money manager pools capital from many different investors, then invests it into different assets. A NIFTY 50 fund (also known as an index fund) allows you to hold all of the NIFTY 50 Index’s stocks at once. 

The first drawback to a mutual fund is that you can only buy into one at the end of the stock market’s trading day, not during regular market trading hours. With the NIFTY 50 ETF, on the other hand, you can buy and sell at any point during trading hours. Another setback is that the NIFTY 50 fund (and mutual funds in general) charge higher fees than ETFs do. So if you’re going to invest, it likely only makes sense to do so if you plan to buy NIFTY 50 stocks and hold for a long time, since a mutual fund is more difficult and more expensive to trade than an ETF.

2. Use our top tips to be a successful investor

Before you start, check out our top investment tips:

  • Do your research. Becoming a successful investor takes time, patience, and hard work. Study the NIFTY 50 Index’s recent and historical performance, and how it stacks up against other investments. After that, decide what your investment goals are in terms of gains, as well as how much you’re willing to lose. The more prepared you are, the better equipped you’ll be to cope with volatile market conditions.
  • Set a budget. The investing budget you set should take into consideration your risk tolerance, as well as how much money you can afford to lose. Don’t let small losses turn into big losses, or else you could hurt both your confidence and your ability to afford future trades.
  • Select the right platform. The right investing platform to choose will depend on your needs. If you’re interested in getting the lowest transaction fees, that’s a very different approach than holding out for top-notch investment advice. In the former scenario, a broker is your best option, and a financial advisor is best suited to the latter. This means it’s imperative that you figure out your specific investment goals before you look for a platform to handle your investments. 
  • Grow your investments gradually. If you’re a beginner investor, start slowly by investing just a small amount of money at first. As you start to gain experience and find success, you can get more aggressive with your investment methods over time.
  • Think long-term. If you’re trying to land the biggest possible gains, buying and holding the NIFTY 50 Index long-term can be a great way to go. If you’re going to try this strategy, though, make sure to do it during bull markets and not bear markets, because bear markets can eat up your capital in a hurry.

3. Choose a platform to invest with

Here’s a rundown of some of the most popular options that investors use:

  • Stockbrokers & NIFTY 50 trading platforms. Online stock brokers are often the best way to invest in the NIFTY 50 Index. They offer easy-to-use tools that make the process seamless. However, these brokers don’t offer much in the way of in-depth investment advice. So if you’re a new investor primarily focused on finding high-level investment guidance, you could consider other options.
  • Robo advisors. Robo advisors execute trades using algorithms, so transaction costs aren’t terribly high. Despite their automated trade execution function, some robo advisors will still allow you to discuss your investment strategy with a human being. Still, robot advisors don’t offer as much investment guidance as a top financial advisor does.
  • Financial advisors. Financial advisors offer the highest level of investment advice. They’ll review your financial goals, go through different investment options, and help you meet your goals well after you’ve made your initial investment. Financial advisors charge more for their services than what you’ll pay with other investment methods, as their expert advice isn’t just given away. That extra cost can sometimes be worth it given the high level of customer service that financial advisors provide, but when you consider that the NIFTY 50 Index is pretty simple, using a financial advisor is generally not necessary unless you’re planning other investments as well.
  • Banks. Your bank gives you the convenience of storing all your financial ventures (such as your checking and savings accounts, your mortgage, and your investments) with one institution. The problem is that banks usually charge high fees without providing the level of service that top financial advisors offer. So unless convenience is your top priority, you should look elsewhere.
1
Min. Deposit
$ 10
Promotion
User Score
10
Up to $240 bonus!
Deposit with ACA, Wire, Pay with my bank
Invest for dividends and get payout on stocks on Ex-Dividend day
Start Trading
Payment Methods:
Bank Transfer, Wire Transfer
Full Regulations:
CySEC, FCA
Investoo Ltd is compensated if you access certain of the products or services offered by eToro USA LLC and/or eToro USA Securities Inc., as applicable. This compensation incentivizes Investoo Ltd to describe those products and services in favorable terms. Any testimonials contained in this communication may not be representative of the experience of other eToro customers and such testimonials are not guarantees of future performance or success.

What should I do now? 

Log into your online broker’s website, decide whether you want to buy an ETF, a mutual fund, or every individual stock in the NIFTY 50 Index in separate trades, then click buy. You should still keep a close eye on your investment after that, as market conditions can shift dramatically and you want to be able to react to events to ensure the safety of your capital and profits.

Try some of our investment courses for beginners

Stocks Courses
If our Stock Markets 101 course was your introduction to stock market investing, think of the Stock Investing course as the next step, your intermediate-level guide to investing. Just remember, this is not a get-rich-quick scheme and takes time, patience, and emotional stability.
Stocks Courses
Luckily, it’s far easier to begin trading than it was in the 90s when Wall Street and big money were the only options. Get started with our introduction to stock trading. You’ll come away feeling more confident about the task ahead, while acquiring a base knowledge of all the most…

Sources & references
Risk disclaimer

Invezz is a place where people can find reliable, unbiased information about finance, trading, and investing – but we do not offer financial advice and users should always carry out their own research. The assets covered on this website, including stocks, cryptocurrencies, and commodities can be highly volatile and new investors often lose money. Success in the financial markets is not guaranteed, and users should never invest more than they can afford to lose. You should consider your own personal circumstances and take the time to explore all your options before making any investment. Read our risk disclaimer >

Harry Atkins
Financial Writer
Harry was a Financial Writer for Invezz, drawing on more than a decade writing, editing and managing high-profile content for blue chip companies, Harry’s considerable experience… read more.