Nifty Next 50 Index Fund

Nifty Next 50 Index Funds invest in new and emerging companies in India, ranking between 51st and 100th position in the Nifty Index. These companies have the potential to grow in the future and offer diversified and low-cost investment options.

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Offer comparatively higher growth than blue-chip companies

Offer comparatively higher growth than blue-chip companies

Comparatively Low Volatility

Comparatively Low Volatility

Great way to diversify

Great way to diversify

Ideal for Long-Term Investors

Ideal for Long-Term Investors

What are Nifty Next 50 Index Fund?

As the name suggests, Nifty Next 50 Index Funds invest in 50 large cap companies that are not part of the Nifty 50 index. These large cap companies rank between 51st and 100th position in the National Stock Exchange of India as per market capitalisation.

Additionally, these companies have the potential to become market leaders in India and offer low-cost and diversified investment options, balancing risks. As an index fund, it aims to replicate the underlying index's performance and provide returns to investors linked closely to the index’s performance.

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Mutual Fund Calculators

Mutual Fund Calculators help investors know how much they will earn from an INDmoney mutual fund investment, especially for SIPs. They can be used to calculate expected earnings based on investment amount, frequency, and potential profit or loss.

Benefits of Investing in Nifty Next 50 Index Fund

Adding Nifty Next 50 Index Funds to your investment mix can offer stable returns. Let’s see how!

  • Long-term Growth Potential

    Nifty Next 50 Index Funds invest in companies which have the highest market value after the top Nifty 50 companies. These companies focus on high growth and hence give more returns generally than more well-established companies. Hence, investing in these companies will enable you to earn higher returns in the long run.

  • Low Cost

    As Nifty Next 50 Index Funds is a passive investment vehicle, it has a lower expense ratio than other actively managed funds. The investors can earn better returns by paying lower charges to the fund houses.

  • Risk Management

    Investing in Nifty Next 50 Index Funds enables you to spread your risk, as they invest in various sectors and companies and it reduces the portfolio impact caused by the poor performance of any one particular company.

Limitations of Investing in Nifty Next 50 Index Mutual Funds

Even with their advantages, these funds come with certain limitations to consider:

  • More Volatile

    Since these companies are comparatively smaller than the Nifty Next 50 Index Funds and focus on high growth and thus higher returns, they tend to be move widely especially to changes in market conditions. In addition, these funds are not stable in comparison to Nifty 50 Index Funds, as they may change depending on the market conditions.

  • High Risk

    The stocks in the Nifty Next 50 Index Funds are comparatively smaller and focus on high growth and thus higher returns, making them more risky. These companies are more susceptible to fluctuations in the market as they are in the growth phase.

  • No Direct Control

    The fund managers manage the funds on behalf of the investors, restricting their control. You won’t be able to take decisions on what companies to invest in and when to enter and exit trades and the fund’s performance is heavily reliant on the fund manager

Who should invest in Nifty Next 50 Index Funds?

Investing in top-ranked Nifty Next 50 Index mutual funds is not a cup of tea for everyone. Let us read below to know which investors could benefit the most from Nifty Next 50 Index investments:

  • First Time Investors

    Since Nifty Next 50 Index Funds is cost-effective, it is ideal for first-time investors in mutual funds. While the Nifty Next 50 tracks the future market leaders, it is still more stable than many other smaller companies.

     

  • Investors with Long-Term Investment Horizon

    Investing in the Nifty Next Fifty Index Fund is ideal for investors with a long-term investment horizon, as it appreciates the value of capital in the long run and offers great returns.

  • Investors Seeking Diversification

    Investors seeking diversification investment options can invest in these funds as they invest in top companies of various sectors. It gives you a broader exposure across industries and hence helps you balance risks.

Points to consider before investing in Nifty Next 50 Index Mutual Funds

  • Expense Ratio

    Before investing in any mutual fund, you should check the costs associated with it. Compare the costs, referred to as expense ratio, of different Nifty Next 50 mutual funds as it will affect your returns. The fund manager charges an expense ratio for managing the fund. Preferably, you should choose a fund with the lowest expense ratio to earn higher returns.

  • Investment Goals

    Before making any investment, you should carefully think about what you want out of the money you are putting in. The Nifty Next 50 Index Fund is an ideal investment option if you have a long-term investment duration and want high growth with high risk. In addition, knowing your investment goals will help you choose the right fund according to your goals.

  • Risk Tolerance

    If you have a relatively high risk tolerance and are looking for high growth, then you can consider Nifty Next 50 Index Funds but they tend to be volatile and fluctuate depending on market conditions. These funds are ideal for investors with moderate or high-risk tolerance levels.

How to start investing in Nifty Next 50 Index Funds with INDmoney?

You can start investing in Nifty Next 50 Index Funds through INDmoney by following these simple and hassle-free steps:

  • Step 1

    Step 1: Download the INDmoney app and create your free investment account by completing your KYC ( Know Your Customer).

  • Step 2

    Once your Free investment account is ready, you can either search for Nifty Next 50 Mutual Funds or go to the mutual fund section and tap on Index Funds under the collection section.

  • Step 3

    Choose a Nifty Next 50 Mutual Fund by looking at aspects like past returns, volatility, downside capture ratio, AUM, Expense ratios and underlying stocks and sectors.

  • Step 4

    You can choose to set up SIP in Nifty Next 50 Mutual Funds or even invest as lumpSum. Once you are on the individual Nifty Next 50 Mutual Funds page click from the bottom “One-time” for lump sum investment or “SIP” for systematic investment plan. 

  • Step 5

    Choose the amount that you want to invest as SIP or LumpSum. 

  • Step 6

    Set up payments. If you choose to set up SIP in Nifty Next 50 Mutual Funds,  you can do a free automatic pay set up via bank mandate or UPI. If you choose to invest in lumpsum (one-time) then you can pay via UPI, netbanking, NEFT or RTGS.

Should you invest in Nifty Next 50 Index Fund?

Overall, investing in Nifty Next 50 Index Funds offers diverse investment opportunities to you, as the funds invest in the growing companies in the Indian economy. It enables you to earn higher returns in the long term if you have a long-term investment horizon. Hence, you can capture the potential growth of the future big companies in India.

Frequently Asked Questions

Nifty Next 50 Index Cap funds are often run by well-reputed AMCs which offer steady and consistent results and have less volatility. Some of the best-performing Nifty Next 50 Index funds you can invest your money in 2024 are:

  • DSP Nifty Next 50 Index Fund Direct Growth
  • UTI Nifty Next 50 Index Fund Direct Growth
  • ICICI Prudential Nifty Next 50 Index Direct Growth
  • HDFC Nifty Next 50 Index Fund

Your returns from Nifty Next 50 Index mutual funds will be taxed under two categories.

  • Under Capital Gains: Short-term capital gains at 15%; Long-term capital gains (over Rs. 1 lakh) at 10%.
  • Tax on Distributed Income Dividend Option: At applicable income tax slab

Yes, Nifty Next 50 Index mutual funds have certain risks involved with them, but they are not as high as mid cap or small cap funds. For this reason, the returns on these funds are stable and suitable for conservative investors.

As an investor, you should look at the following features of a Nifty Next 50 Index mutual fund before making a decision.

  • Historical performance of the fund manager
  • Expense ratio
  • Past performance of the Nifty Next 50 Index MF
  • Fund portfolio

Try to invest your money in a Nifty Next 50 Index fund for a minimum of 3 to 5 years to get a good return after the tenure ends.

The average return on a one-year Nifty Next 50 Index mutual fund is generally 16.15% depending on the market. However, as the market is volatile, you cannot expect to get the same return as you got in the previous years.

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