Supported Benchmarks
The optimizer supports 14 Indian equity benchmarks and 3 US total-return benchmark proxies. Each series has a history window that directly constrains the dates a run uses when you select it.
How benchmarks are used
The benchmark you choose serves two purposes:
- Risk-adjusted reporting. CAPM beta, Jensen's alpha, tracking error, information ratio, Treynor ratio, upside / downside capture, and any other relative metric is computed against the benchmark return series over the overlap window between your asset history and the benchmark history.
- History alignment. If the benchmark starts later than your assets, the optimizer truncates the asset price series to the benchmark window. The weights and every post-optimization metric are then computed on the same dates, so a benchmark with a short history also shortens the history the optimizer estimates from.
Choose a benchmark that genuinely represents the universe you are optimizing. A NIFTY 50 benchmark on a smallcap-heavy portfolio will mechanically inflate beta and alpha noise; a NIFTY Smallcap 250 benchmark is a more honest reference.
Price return or Total Return Index
An Indian index is published in two forms. The price index is the level you see quoted every day: it moves with the prices of its constituents and nothing else. The Total Return Index (TRI) also reinvests the dividends those constituents pay, so it grows faster than the price index by roughly the index dividend yield each year.
Your portfolio's returns always include dividends, because its prices are adjusted for them. The benchmark basis decides what it is compared with:
| Basis | Series | Effect on relative metrics |
|---|---|---|
| Price return (default for retail runs) | The index level, for example NIFTY 50. | Jensen's alpha and the information ratio read high by about the index dividend yield, because the portfolio earns dividends and the benchmark does not. On stored runs against NIFTY 50 this was about 0.9 percentage points of alpha. |
| Total return (TRI) | NSE Indices' Total Return Index, for example NIFTY 50 TRI. | Both sides include dividends, so alpha and the information ratio compare like with like. |
On the same dates, beta, tracking error and M2 barely change between the two, because they read the benchmark's movements and volatility, not its average return. They can still move a little when the Total Return Index covers fewer years than the price index, because the run then aligns to a shorter window (see NIFTY 50 below).
An example on a stored NIFTY 50 run: Jensen's alpha fell from 7.3% to 6.2% for mean-variance and from 6.9% to 6.0% for HRP, and the information ratio fell from 0.68 to 0.51 and from 0.39 to 0.26.
Where the choice applies
- Every Indian benchmark except BSE SENSEX has a Total Return Index. SENSEX is measured as a price index.
- The US benchmarks (SPY, QQQ, IWV) are total-return ETFs already, so they have no choice to make.
- A Fund Manager Mode run that names no benchmark measures against NIFTY 500 TRI. If it names a benchmark but no basis, it uses that benchmark's Total Return Index, except SENSEX, which keeps the price index. A retail run keeps NIFTY 50 on the price index as its default.
- A rolling backtest or Monte Carlo run built on an optimization uses the same benchmark and basis as that optimization.
- The results page, the PDF and Excel reports, and the MCP tools all name the basis a run used, for example "NIFTY 50 TRI".
Where the data comes from
Both series come from NSE Indices Ltd, the publisher of the NIFTY family. FolioLab keeps its own store of index levels, loaded from each index's first published day and updated every night, and a run reads its benchmark from that store rather than from a live market data feed. When the store was loaded, every stored price level agreed with the NSE Indices value to within 0.01%.
The Total Return Index is never replaced by the price index: if it cannot be read, the run stops with a message rather than silently measuring against the wrong series. A Total Return Index is read only from the store or from NSE Indices. If a stored index ends more than seven days before the end of the run window, the run looks for more recent levels (from NSE Indices for a Total Return Index, and from NSE or a market data vendor for a price index) and uses them only when they are at least as recent as the stored series.
BSE SENSEX is published by BSE, not NSE Indices. Its price index comes from a market data vendor (Yahoo Finance), and the platform holds no Total Return Index for it.
The Total Return Index of NIFTY 50 starts on 30 June 1999, later than its price index (July 1990). A NIFTY 50 run on the TRI basis therefore aligns to 1999 at the earliest. Every other NIFTY index has its TRI from the same date as its price index.
Benchmark catalogue
Broad market
| Benchmark | Approx. start | Notes |
|---|---|---|
NIFTY 50 id: nifty | ~1990 | Default benchmark for NSE-listed equities. Widest history of any Indian benchmark on the platform. |
BSE SENSEX id: sensex | ~1997 | Default benchmark for BSE-listed equities. Only available when the chosen exchange is BSE, and the only choice for BSE listings on the Optimize page. Price index only: SENSEX has no Total Return Index on the platform. |
Sectoral
| Benchmark | Approx. start | Notes |
|---|---|---|
NIFTY Bank id: bank_nifty | ~2000 | Bank-sector benchmark. Useful when the universe skews toward financials. |
NIFTY family (large caps)
| Benchmark | Approx. start | Notes |
|---|---|---|
NIFTY 100 Limited history id: nifty_100 | ~2003 | Top 100 by free-float market cap. Limited history relative to NIFTY 50. |
NIFTY 200 Limited history id: nifty_200 | ~2004 | Top 200 by free-float market cap. Limited history. |
NIFTY 500 Limited history id: nifty_500 | ~1995 | Broadest NIFTY index. Reasonable history but still shorter than NIFTY 50 in some sub-windows. Default benchmark for Fund Manager Mode, on its Total Return Index. |
Midcap
| Benchmark | Approx. start | Notes |
|---|---|---|
NIFTY Midcap 150 (alias) Limited history id: nifty_midcap | ~2005 | Alias of the NIFTY Midcap 150 series for backward compatibility. |
NIFTY Midcap 50 Limited history id: nifty_midcap_50 | ~2004 | Concentrated 50-stock midcap basket. |
NIFTY Midcap 100 Limited history id: nifty_midcap_100 | ~2003 | Wider midcap basket. Common reference for diversified midcap-tilted portfolios. |
NIFTY Midcap 150 Limited history id: nifty_midcap_150 | ~2005 | Standard midcap benchmark used by many active and index funds. |
Smallcap
| Benchmark | Approx. start | Notes |
|---|---|---|
NIFTY Smallcap 250 (alias) Limited history id: nifty_smallcap | ~2005 | Alias of the NIFTY Smallcap 250 series for backward compatibility. |
NIFTY Smallcap 50 Limited history id: nifty_smallcap_50 | ~2005 | Concentrated 50-stock smallcap basket. Higher dispersion across periods. |
NIFTY Smallcap 100 Limited history id: nifty_smallcap_100 | ~2004 | Standard smallcap benchmark with broader coverage than the 50-stock variant. |
NIFTY Smallcap 250 Limited history id: nifty_smallcap_250 | ~2005 | Broadest smallcap benchmark with reduced single-stock concentration. |
Start years are the first year of stored history. For a NIFTY index this is the first day NSE Indices publishes, which for an index launched later (for example NIFTY Midcap 150, launched in 2016) is its back-calculated history. The Total Return Index starts on the same day, except NIFTY 50 TRI (30 June 1999). The optimizer uses the actual first observation in the data, not the calendar inception.
Limited-history acknowledgement
When you pick any benchmark other than NIFTY 50, BSE SENSEX, or NIFTY Bank, the configuration card surfaces an amber warning and a checkbox you must tick before submitting:
Limited price history for this configuration
The selected benchmark only has data from a more recent date onwards. The optimizer will truncate the asset price series to align with the benchmark window so post-optimization metrics (alpha, beta, tracking error, information ratio, etc.) are computed over a consistent overlap.
The same warning fires for both equity and mutual fund runs. For mutual funds it always shows, because fund NAV history starts no earlier than April 2006, the first month of AMFI's published NAV history.
Choosing a benchmark in practice
Large-cap or diversified portfolios. NIFTY 50, BSE SENSEX, or NIFTY 100. NIFTY 50 has the longest history.
Broad-market diversified portfolios. NIFTY 200 or NIFTY 500. Both are limited-history.
Midcap-tilted portfolios. NIFTY Midcap 100 or NIFTY Midcap 150. The 50-stock variant is more concentrated and noisier.
Smallcap-tilted portfolios. NIFTY Smallcap 250 is the broadest. Smallcap 50 is highly concentrated and may not reflect a diversified smallcap universe.
Bank or financials concentration. NIFTY Bank when more than ~40 percent of the universe is financials; otherwise prefer a broad benchmark.
Mutual fund runs. Use an Indian benchmark that matches the schemes' mandate, such as NIFTY 500 for diversified equity funds or the relevant midcap or smallcap family index.
References
NSE Indices methodology documents (NIFTY 50, NIFTY 100/200/500, NIFTY Midcap 50/100/150, NIFTY Smallcap 50/100/250, NIFTY Bank).
BSE SENSEX methodology document.
NSE Indices historical index data and Total Return Index data (niftyindices.com).
Start dates are the first day of stored history: NSE Indices for the NIFTY family, and the market data vendor for SENSEX.
Not investment advice. Past performance is not indicative of future results.