New Delhi, June 25 -- Everyone says 'diversify', but your index might not actually be that well-diversified!

When you invest in an index fund, the first two names that come to mind are Sensex and Nifty. Sensex, India's oldest stock market index, represents only the leading 30 companies listed on the Bombay Stock Exchange (BSE). In contrast, the Nifty 50 tracks the top-performing 50 companies traded on the National Stock Exchange (NSE).

One index holds 30 stocks, the other 50 but does that make Nifty truly more diversified? And does this diversity translate into better growth, stability or returns?

In this article, we will find out if the number of stocks really matters or it is just superficial information to lure investors.

At first ...