S&P500 vs Nifty 50 For Retirees?

The S&P 500 is one of the most recognized benchmarks in the global stock market. This index gives investors exposure to the top 500 U.S. companies based on market cap. The stocks in this index must be profitable, and it replaces some laggards with qualifying top-performers every quarter.

However, investors may not know as much about the Nifty 50, the benchmark that’s used in the Indian Stock Market, and that’s a shame. It offers solid portfolio diversification and attractive long-term returns. These are some of the things to consider when choosing between the S&P 500 and the Nifty 50 for your retirement portfolio.  

Portfolio Diversification

The S&P 500 has more portfolio diversification than the Nifty 50. The U.S. benchmark contains 10 times as many stocks as the Indian benchmark. Tech makes up a large portion of the S&P 500’s holdings, while financial stocks heavily influence the Nifty 50.

Although the S&P 500 offers more diversification, having more stocks in the basket doesn’t necessarily result in higher returns. The S&P 500 has some duds in its basket, while the Nifty 50 only has 50 stocks. Having a smaller number of stocks means there are fewer duds, especially when concentrating the portfolio around the 50 largest companies in India.

Long-Term Returns

Both benchmarks are evenly matched year-to-date, but if you expand the time horizon, it’s not even close. The S&P 500 has delivered an impressive 101% return over the past five years, but that result significantly trails the Nifty 50’s 140% return over the same stretch.

This trend also plays out in the long run. The S&P 500 has a return that’s a little more than 400% over the past 20 years. The Nifty 50 has gained more than 1,000% during the same amount of time. These data points are based on how both benchmarked performed from July 2005 to July 2025.

Indian Vs. U.S. Economies

The Indian and U.S. economies are both growing, but India is one of the fastest-growing economies worldwide. The U.S. posted 2.8% GDP growth in 2024, while India delivered 6.5% GDP growth in fiscal 2024.

A faster-growing economy translates into better corporate earnings and higher stock prices. This GDP growth is part of the reason why the Nifty 50 has outperformed the S&P 500 over many years.

Global Scale

U.S. corporations aren’t just the most valuable companies in the United States. They are also the most valuable publicly traded corporations on the planet. That means the S&P 500 stocks have larger market caps than the Nifty 50 stocks. It’s harder to move a stock with a large market cap, but these same stocks also tend to remain more stable than small cap stocks during corrections.

Furthermore, the top U.S. corporations get a lot of their revenue from international customers. Almost half of these companies’ revenue comes from outside the United States. Meanwhile, the corporations in the Nifty 50 do almost all of their business in India, meaning more of their revenue is tied to one of the fastest-growing economies on the planet. 

The Nifty 50’s heavy focus on Indian commerce works well since India is a fast-growing economy. It would be a disadvantage if India weren’t growing as quickly. Meanwhile, the S&P 500 is more diversified to the global economy, but that includes receiving revenue from countries with lower GDP growth rates and using those figures to predict future growth rates.

The Final Verdict

You don’t have to choose one or the other. Both funds have rewarded long-term investors over lengthy time horizons. While the S&P 500 is heavily concentrated in tech, the Nifty 50 prioritizes financial stocks.

However, if you could only choose one of these benchmarks, the Nifty 50 has delivered much higher returns. Although the indices have delivered similar year-to-date returns, the gap expands more in the Nifty 50’s favor as you look at them with a wider lens.

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