NIFTY 500 Multifactor MQVLv 50 Index

Table of Content

1. Unit Linked Insurance Plans (ULIPs)

2. What is the NIFTY 500 Multifactor MQVLv 50?

3. What makes NIFTY 500 Multifactor MQVLv 50 Index Special?

4. NIFTY 500 Multifactor MQVLv 50 Index: Constituents and Selection Methodology

5. What Are the Key Sectors in the NIFTY 500 Multifactor MQVLv50 Index?

6. Stock Selection Criteria and Weighting Methodology for NIFTY 500 Multifactor MQVLv 50 Index

7. What Are the Key Stocks Under NIFTY 500 Multifactor MQVLv 50 Index?

8. How Has the Performance ofNIFTY 500 Multifactor MQVLv 50 Index and Other Indices Been?

9. How to Invest in NIFTY 500 Multifactor MQVLv 50 Index?

9. Frequently Asked Questions (FAQs) About NIFTY 500 Multifactor MQVLv 50 Index

As discussed, this index clubs four factors, i.e., momentum, quality, value and low volatility, to curate a portfolio of 50 stocks from the NIFTY 500. It focuses on companies that perform steadily, have strong financial health and give returns without taking too much risk.

Investors may use it as a benchmark or explore it through investment options like Unit Linked Investment Plans (ULIPs) and equity funds.

Unit Linked Insurance Plans (ULIPs)

ULIP are a unique investment product in the market that combines life cover with market-related growth. They allow policyholders to invest in equity funds based on indexes such as NIFTY 500 Multifactor MQVLv 50, offering dual benefits, i.e., financial protection and wealth creation.

Also, this market-linked insuranceproduct provides flexibility, enabling investors to choose funds, switch strategies and track performance while participating in diversified equity portfolios.

The Funds are available with following ULIP Products:

• HDFC Life Click 2 Invest (UIN: 101L178V01)
• HDFC Life Smart Protect Plan (UIN: 101L175V07)
• HDFC Life Sampoorn Nivesh Plus (UIN: 101L180V01)
• HDFC Life Click 2 Wealth (UIN: 101L133V03)

What is the NIFTY 500 Multifactor MQVLv 50?

The NIFTY 500 Multifactor MQVLv 50 Index is a factor-based index launched by the National Stock Exchange (NSE). It picks 50 stocks from the NIFTY 500 universe using factors, i.e., momentum (current price performance), quality (profitability as well as financial strength), value (attractive valuations) and low volatility (price stability).

Here, the basic idea is to blend growth, stability and affordability to create a balanced portfolio. With a base date of 1st April 2005 and a base value of 1000, it serves as a prudent benchmark for diversified equity investing.

What makes NIFTY 500 Multifactor MQVLv 50 Index Special?

Unlike traditional indices that depend on the market capitalization approach, this index considers a multi-factor approach to pick stocks. By blending momentum, value, quality and low volatility, it minimizes reliance on a single parameter and provides diversified and risk-adjusted growth.

This makes it attractive for long-term investors looking for consistent returns across market cycles.

NIFTY 500 Multifactor MQVLv 50 Index: Constituents and Selection Methodology

Only stocks from the NIFTY 500 universe are considered for inclusion. First, liquidity evaluations are applied, and low-liquidity stocks are excluded. Next, a selection approach is followed:

• Momentum score – Depends on six-month and 12-month price returns, adjusted for volatility.
• Quality score – Examined using Return on Equity (ROE), Debt-To-Equity Ratio and Earnings Per Share (EPS) growth stability over five years.
• Value score – Computed utilizing ratios such as Earnings-to-Price (E/P), Book-to-Price (B/P), Sales-to-Price (S/P) and Dividend Yield.
• Volatility score – Measured as the standard deviation of daily price returns over one year.

An eligible universe is created by picking the top 25 stocks under every factor. The final 50 are selected depending on aggregate percentile scores, and stock weights are assigned by making use of composite scores.

The index is reconstituted semi-annually (June and December), ensuring periodic alignment with market conditions. This systematic and rules-based approach eliminates any kind of bias, offers diversification and ensures that only fundamentally robust and relatively stable stocks form part of the index.

The top 10 constituents as of July 31, 2025 are:

Source: https://www.niftyindices.com/Factsheet/Factsheet_Nifty500MultifactorMQVLv50.pdf

What Are the Key Sectors in the NIFTY 500 Multifactor MQVLv50 Index?

The index is sector-diverse, which ensures no over-concentration. It includes financial services, Information Technology (IT), consumer goods, healthcare and energy. Also, it represents emerging sectors such as telecom and infrastructure. This sectoral mix assists in balancing cyclical industries with defensive ones, making the portfolio resilient across market conditions.

Following are the key sectors along with their weightage:

Source: https://www.niftyindices.com/Factsheet/Factsheet_Nifty500MultifactorMQVLv50.pdf

Stock Selection Criteria and Weighting Methodology for NIFTY 500 Multifactor MQVLv 50 Index

The NIFTY 500 Multifactor MQVLv 50 Index considers a structured and rule-based process to pick stocks. The methodology makes sure only fundamentally strong and liquid companies are added. Steps are:

• Eligibility – Only stocks from the NIFTY 500 index are considered for inclusion.
• Liquidity filter – Stocks with weak liquidity are screened out to ensure invest ability.
• Factor scoring – Each company is examined on four factors:

✔ Momentum – six-month and 12-month price returns adjusted for volatility.

✔ Quality – ROE, Debt-to-Equity Ratio, and stability of EPS growth over five years.

✔ Value – Based on ratios likeE/P,B/P, S/P and Dividend Yield.

✔ Low volatility – Standard deviation of daily price returns over the past year.

• Aggregate ranking – An eligible universe is created by picking the top 25 stocks under each factor. The 50 highest aggregate scorers form the index.

Once the top 50 stocks are shortlisted, the index assigns weights in a manner that rewards stronger performers without creating any kind of bias. The process is as follows:

• Composite factor weights – In place of equal allocation, the weight of every stock is derived from its composite multi-factor score.
• Higher weight to stronger stocks – Companies with stronger multi-factor fundamentals hold larger weights, while weaker scorers hold smaller proportions.
• Diversification advantage – This approach decreases concentration bias and ensures balanced exposure across factors.
• Rebalancing – The index is reconstituted on a semi-annual basis (June and December)in order to show updated market fundamentals and factor dynamics.

What Are the Key Stocks Under NIFTY 500 Multifactor MQVLv 50 Index?

The index features an excellent mix of large-cap, mid-cap and select small-cap stocks having strong multi-factor scores. Sectors such as banking, IT, pharmaceuticals and consumer goods often dominate.

Also, other areas such as energy, industrials and financial services tend to contribute. The sectoral mix shifts dynamically with semi-annual rebalancing, which ensures diversification and alignment with changing market scenarios.

How Has the Performance ofNIFTY 500 Multifactor MQVLv 50 Index and Other Indices Been?

Source:

https://www.niftyindices.com/Factsheet/Factsheet_Nifty500MultifactorMQVLv50.pdf https://www.niftyindices.com/Factsheet/ind_nifty_500.pdf  and https://www.niftyindices.com/Factsheet/ind_nifty50.pdf

Returns as of July 31, 2025

How to Invest in NIFTY 500 Multifactor MQVLv 50 Index?

Investors can take part in this index in two ways. They are:

• Direct market products – Via Exchange Traded Funds (ETFs) or index funds that track the NIFTY 500 Multifactor MQVLv 50. You can easily apply for such market-linked products by getting in touch with brokers or mutual fund houses.
• ULIPs– Certain ULIPs allow policyholders to allocate funds to equity indices, including multifactor indices. This offers dual benefits of insurance cover and market-associated growth.

To invest, investors must verify if their mutual fund house or ULIP provider offers exposure to this multifactor index. Also, investors must factor in their investment time frame and risk tolerance level before choosing such multifactor products.

Historically, the index has shown positive long-term returns, though like all equity investments, it might experience short-term market volatility.

Important Note: The above information is only mentioned with the purpose of providing you with details of the NIFTY 500 Multifactor MQVLv 50 Index

Frequently Asked Questions (FAQs) About NIFTY 500 Multifactor MQVLv 50 Index

Q. How many stocks are featured on the NIFTY 500 Multifactor MQVLv 50Index, and who selects these stocks?

The NIFTY 500 Multifactor MQVLv 50 Index features 50 stocks. These stocks are selected depending on a combination of momentum, quality, value and low volatility factors using a rule-based methodology applied to the broader NIFTY 500 universe.

The selection is done by the National Stock Exchange (NSE) Indices. And the index is reconstituted semi-annually to update its constituents depending on the composite factor scores.

Q. Can small-cap and mid-cap stocks be included in the NIFTY 500 Multifactor MQVLv 50Index?

Small-cap and mid-cap stocks can be included in the NIFTY 500 Multifactor MQVLv 50 Index if they meet the multifactor criteria within the broader NIFTY 500 universe, which includes large, midand small-cap companies.

Q. What does a positive alpha score indicate about a stock?

A positive alpha score shows that a stock has historically delivered returns above what would be anticipated based on its risk, reflecting superior risk-adjusted performance.

Q. How does the NSE classify the NIFTY 500 Multifactor MQVLv 50Index?

The NSE classifies the NIFTY 500 Multifactor MQVLv 50 Index as a strategy index that selects 50 stocks from the NIFTY 500 by making use of a multifactor model based on momentum, quality, value and low volatility factors.

Q. Can a high alpha stock that was listed six months ago be included in the NIFTY 500 Multifactor MQVLv 50?

A high alpha stock listed six months ago can be included in the NIFTY 500 Multifactor MQVLv 50 Index only if it passes the liquidity, eligibilityand factor-based selection criteria during the semi-annual rebalancing.