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Best Nifty Next 50 Index Fund 2023 – What is Nifty 50 Index Fund?

best next 50 index fund Best Nifty Next 50 Index Fund 2023

What is Nifty 50 Index Fund?

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The Nifty 50 Index Fund is a type of mutual fund or exchange-traded fund (ETF) that tracks the performance of the Nifty 50 index. The Nifty 50 is an index of the National Stock Exchange of India (NSE), which consists of the 50 largest and most actively traded companies listed on the NSE.
These companies come from various sectors such as banking, finance, energy, information technology, and others.

Investing in a Index Fund provides investors with a way to gain exposure to a diversified portfolio of large-cap Indian companies, without the need to buy individual stocks.
The fund’s returns are linked to the performance of the Nifty 50 index, and as such, can be used to benchmark the performance of the broader Indian stock market.
Nifty 50 Index Funds are popular among investors who prefer passive investment strategies and want to invest in the Indian stock market.

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How does the Nifty 50 index fund work?

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Here is how the Index Fund works:

  1. A fund manager pools money from investors and buys a portfolio of stocks that mirrors the Nifty 50 Index.
  2. The Fund invests in all the 50 stocks in the index, in the same weightage as the index.
  3. The performance of the Fund is closely linked to the performance of the Nifty 50 Index, as the fund's returns are based on the returns of the underlying index.
  4. The fund manager may buy and sell stocks in the portfolio to keep it in line with the index. This process is called re-balancing and it helps to ensure that the portfolio remains aligned with the index's composition.
  5. Investors can buy and sell units of the Index Fund on the stock exchange, just like any other stock. The price of the fund's units is determined by the market forces of supply and demand.
  6. The fund manager deducts a small fee, known as the expense ratio, for managing the fund.
  7. The Fund provides investors with a low-cost way to invest in a diversified portfolio of stocks that mirrors the Nifty 50 Index.
  8. The fund's performance can be benchmarked against the Nifty 50 Index to evaluate how well the fund is performing.
  9. The Fund is a passive investment strategy, which means it follows the market and does not attempt to beat it through active stock selection.
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Pros & Cons

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Here are some pros and cons of investing in Nifty 50 Index Funds:

Pros:

  1. Diversification:
    As the Nifty 50 Index Fund invests in 50 stocks, it offers investors a diversified portfolio of large-cap Indian companies, which reduces the risk of investing in individual stocks.
  2. Low Cost:
    This Funds are passively managed, which means the fees charged by fund managers are lower than actively managed funds. This makes it a cost-effective investment option.
  3. Easy Access:
    Funds are traded on the stock exchange, which makes it easy for investors to buy and sell units of the fund.
  4. Transparency:
    As the Nifty 50 Index Fund tracks the Nifty 50 Index, its performance is transparent, and investors can easily track the performance of their investments.
  5. Benchmarking:
    The Fund can be used to benchmark the performance of other equity funds or individual stock investments.

Cons:

  1. Market Risk:
    The performance of the Index Fund is directly linked to the performance of the Indian stock market. This means that the fund's returns can be affected by market volatility and fluctuations.
  2. Limited Exposure:
    As the Index Fund invests only in large-cap Indian companies, it may not provide exposure to smaller companies or international markets.
  3. No Active Management:
    The Index Fund follows a passive investment strategy and does not attempt to beat the market through active stock selection. This means that investors may miss out on opportunities to earn higher returns.
  4. No Control over Portfolio:
    As the Fund invests in stocks that mirror the Nifty 50 Index, investors have no control over the composition of the fund's portfolio.
  5. Sector Concentration:
    The Nifty 50 Index is heavily weighted towards a few sectors such as financials and information technology. This can lead to sector concentration risk for investors in the Index Fund.
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Nifty 50 vs Nifty Next 50 Index Fund

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The Nifty 50 Index Fund and Nifty Next 50 Index Fund are both popular index funds in India. Here are some key differences between the two:

  1. Composition:
    The Nifty 50 Index Fund tracks the Nifty 50 Index, which includes the 50 largest and most actively traded companies listed on the National Stock Exchange (NSE) of India. The Nifty Next 50 Index Fund tracks the Nifty Next 50 Index, which includes the 50 companies listed on the NSE that are ranked 51 to 100 based on their market capitalization. The Nifty 50 Index Fund consists of large-cap companies, while the Nifty Next 50 Index Fund has a mix of mid-cap and large-cap companies.
  2. Risk and Return:
    The Nifty 50 Index Fund invests in established and well-known companies with a proven track record, which can result in stable returns with relatively lower risk. The Nifty Next 50 Index Fund invests in companies that are in the process of growing and expanding their business, which can result in higher returns but with higher risk.
  3. Diversification:
    The Nifty 50 Index Fund provides a high level of diversification, as it invests in 50 companies from various sectors. The Nifty Next 50 Index Fund also provides diversification but to a lesser extent, as it invests in a smaller number of companies.
  4. Expense Ratio:
    The expense ratio of Nifty 50 Index Funds is usually lower than that of Nifty Next 50 Index Funds. This is because Nifty 50 Index Funds invest in larger companies, which are more liquid and require less trading, resulting in lower expenses.
  5. Liquidity:
    Both Nifty 50 Index Funds and Nifty Next 50 Index Funds are highly liquid, as they are traded on the stock exchange like any other stock. However, the Nifty 50 Index Fund may be more liquid than the Nifty Next 50 Index Fund, as it invests in larger companies that are more actively traded.

Best Nifty Next 50 Index Fund

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Here are some of the best Nifty Next 50 Index Funds in India with their past performance:

ICICI Prudential Nifty Next 50-

RETURNS 

Period Invested for₹10000 Invested onLatest ValueAbsolute ReturnsAnnualised ReturnsCategory AvgRank within Category
1 Year19-Apr-229046.50-9.53%-9.54%3.64%242/260
2 Year19-Apr-2111305.7013.06%6.33%9.45%127/167
3 Year17-Apr-2016277.5062.78%17.60%20.36%103/132
5 Year19-Apr-1812617.9026.18%4.76%9.19%91/96
10 Year18-Apr-1333074.00230.74%12.70%11.77%24/65
Since Inception25-Jun-1033842.00238.42%9.97%6.59%98/317

SIP RETURNS

Period Invested for₹1000 SIP Started onInvestmentsLatest ValueAbsolute ReturnsAnnualised Returns
1 Year19-Apr-221200011379.51-5.17 %-9.45 %
2 Year19-Apr-212400022966.84-4.3 %-4.18 %
3 Year17-Apr-203600039381.129.39 %5.92 %
5 Year19-Apr-186000072989.8721.65 %7.77 %
10 Year18-Apr-13120000199628.5366.36 %9.83 %

SBI ETF Nifty Next 50

RETURNS 

Period Invested for₹10000 Invested onLatest ValueAbsolute ReturnsAnnualised ReturnsCategory AvgRank within Category
1 Year19-Apr-229101.50-8.98%-8.98%3.64%87/120
2 Year19-Apr-2111458.2014.58%7.04%9.45%86/101
3 Year17-Apr-2016616.9066.17%18.41%20.36%82/89
5 Year19-Apr-1813139.4031.39%5.61%9.19%52/74
Since Inception20-Mar-1521050.50110.50%9.64%6.59%75/124

SIP RETURNS

Period Invested for₹1000 SIP Started onInvestmentsLatest ValueAbsolute ReturnsAnnualised Returns
1 Year19-Apr-221200011417.12-4.86 %-8.88 %
2 Year19-Apr-212400023119.38-3.67 %-3.56 %
3 Year17-Apr-203600039828.6710.64 %6.68 %
5 Year19-Apr-186000074551.3124.25 %8.62 %

UTI Nifty Next 50 Index

RETURNS 

Period Invested for₹10000 Invested onLatest ValueAbsolute ReturnsAnnualised ReturnsCategory AvgRank within Category
1 Year19-Apr-229042.70-9.57%-9.57%3.64%244/260
2 Year19-Apr-2111305.7013.06%6.33%9.45%128/167
3 Year17-Apr-2016323.7063.24%17.71%20.36%102/132
Since Inception28-Jun-1813697.4036.97%6.76%6.59%135/317

SIP RETURNS

Period Invested for₹1000 SIP Started onInvestmentsLatest ValueAbsolute ReturnsAnnualised Returns
1 Year19-Apr-221200011373.17-5.22 %-9.54 %
2 Year19-Apr-212400022955.22-4.35 %-4.22 %
3 Year17-Apr-203600039390.629.42 %5.94 %

Kotak Nifty Next 50 Index

RETURNS

Period Invested for₹10000 Invested onLatest ValueAbsolute ReturnsAnnualised ReturnsCategory AvgRank within Category
1 Year19-Apr-229086.20-9.14%-9.14%3.38%236/260
2 Year19-Apr-2111363.2013.63%6.60%9.30%125/167
Since Inception03-Mar-2110972.009.72%4.45%6.59%181/317

SIP RETURNS

Period Invested for₹1000 SIP Started onInvestmentsLatest ValueAbsolute ReturnsAnnualised Returns
1 Year19-Apr-221200011397.91-5.02 %-9.17 %
2 Year19-Apr-212400023047.77-3.97 %-3.85 %

FAQs

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  1. How is the Nifty Next 50 Index Fund different from the Nifty 50 Index Fund?

    A: The Nifty Next 50 Index Fund tracks the Nifty Next 50 index, which consists of the 50 companies listed on the NSE that are ranked 51 to 100 based on their market capitalization. The Nifty 50 Index Fund, on the other hand, tracks the Nifty 50 index, which consists of the 50 largest and most actively traded companies listed on the NSE.

  2. What are the benefits of investing in a Nifty Next 50 Index Fund?

    A: Investing in a Nifty Next 50 Index Fund provides investors with exposure to a diversified portfolio of mid-cap Indian companies, which have the potential for high growth. It also offers diversification and low-cost investment options, like the Nifty 50 Index Fund.

  3. Are Nifty Next 50 Index Funds riskier than Nifty 50 Index Funds?

    A: Nifty Next 50 Index Funds are generally considered riskier than Nifty 50 Index Funds due to their exposure to mid-cap companies, which are more volatile than large-cap companies. However, they can offer higher returns to investors who are willing to take on the additional risk.

  4. How do I invest in a Nifty Next 50 Index Fund?

    A: Investors can invest in Nifty Next 50 Index Funds through mutual funds or exchange-traded funds (ETFs). They can buy and sell units of the fund on the stock exchange, just like any other stock.

  5. Can Nifty Next 50 Index Funds be used as a benchmark for other investments?

    A: Yes, Nifty Next 50 Index Funds can be used as a benchmark for other equity funds or individual stock investments. It is considered a useful benchmark to evaluate the performance of mid-cap Indian companies.

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