Nifty Next 50 Index Fund: Smart Investing, Easy Returns

Diversification is frequently praised in the investing community as a crucial tactic for reducing risk and optimizing returns. Index funds, one of the many investment options, are becoming more and more well-liked due to their ease of use and capacity to provide diversified exposure to a portfolio of stocks. Nifty Next 50 Index Fund is one such index fund that has attracted notice.

Best Nifty Next 50 Index Funds in 2023

Nifty Next 50 Index Funds	Features
Navi Nifty Next 50 Index Mutual Fund	NAV: ₹8.74 AUM: ₹95.61 Crore Expense Ratio: 0.12%
Aditya Birla Sun Life Mutual Fund	NAV: ₹9.16 AUM: ₹34.68 Crore Expense Ratio: 0.35%
Axis Nifty Next 50 Index Mutual Fund	NAV: ₹9.10 AUM: ₹78.34 Crore Expense Ratio: 0.23%
DSP Nifty Next 50 Index Mutual Fund	NAV: ₹14.5 AUM: ₹244.48 Crore Expense Ratio: 0.3%
Edelweiss Nifty Next 50 Index Mutual Fund	NAV: ₹8.54 AUM: ₹17.91 Crore Expense Ratio: 0.22%
HDFC NIFTY Next 50 Index Mutual Fund	NAV: ₹8.72 AUM: ₹372.02 Crore Expense Ratio: 0.3%
HSBC Nifty Next 50 Index Mutual Fund Direct	NAV: ₹16.20 AUM: ₹62.25 Crore Expense Ratio: 0.35%
ICICI Prudential Nifty Next 50 Mutual Index	NAV: ₹35.20 AUM: ₹2585.12 Crore Expense Ratio: 0.3%
Kotak Nifty Next 50 Index Mutual Fund	NAV: ₹10.72 AUM: ₹102.6 Crore Expense Ratio: 0.31%
Nippon India Nifty Next 50 Junior BeES FoF	NAV: ₹13.82 AUM: ₹163.12 Crore Expense Ratio: 0.02%

What is the Nifty Next 50 index fund?

One kind of passively managed equity fund that tracks the Nifty Next 50 index is the Nifty Next 50 index fund. The performance of the next 50 company stocks, which are listed based on total market capitalization, after the Nifty 50 stocks are represented by the Nifty Next 50 index. In general, these businesses could one day be considered for the Nifty 50 list. Purchasing Nifty Next 50 index funds could enable you to profit from the expansion of leading Indian businesses.

How to Invest in the NIFTY Next 50 Index Fund?

Online Process

Investing through AMC’s Website

- Go to the AMC‘s official website.
- Complete the necessary fields.
- Fill out the e-KYC form with your Aadhaar card and PAN card details.

Investing through a Mobile Application

- Install the app
- Enter your contact information to sign up.
- Finish the e-KYC procedure.
- Upon approval and verification of your application, you can begin investing in the top 50 mutual funds listed in the Nifty Next 50.

Offline Process

Speak with an empaneled distributor or a fund house representative.
Get the application and KYC form from the fund house’s website, if the KYC process isn’t finished.
Complete the application form and include all required details (name, address, PAN, email address, mobile number, etc.). In addition to being used for registration purposes for online transaction services, this email address and mobile number will be kept for future correspondence.
Enclose copies of pertinent documentation and send it in with a demand draft or check for the desired amount of investment.
Send the application and/or KYC (if applicable) forms, along with the check and all necessary paperwork, to any fund house branch or point of acceptance.
After that, the fund house will assign you a folio number for that specific investment. An Account Statement will also be sent to you once the transaction has been completed.

Benefits of Investing in the Nifty Next 50 Index?

Diversification: The Nifty Next 50 Index Fund reduces the investment portfolio’s overall risk by exposing investors to a diverse range of businesses across multiple industries.
Professional management: Investors can benefit from professional fund management, which does away with the need for individual stock selection, by making investments in the Nifty Next 50 Index Fund.
Low cost: The Nifty Next 50 Index Fund has lower management fees than actively managed funds because it is a passive investment vehicle. As a result, investors receive higher overall returns.
Convenience: Investing in the Nifty Next 50 Index Fund is an easy way for investors who lack the time or expertise to analyze individual stocks in-depth.
Access to growth companies: The Nifty Next 50 Index Fund exposes investors to rapidly expanding businesses with room to grow. Investors may benefit from long-term capital growth in this way.

Factors to Consider Before Investing in Nifty Next 50 Index Fund

Investment Goals: Establish your financial objectives and the time horizon for achieving them. This will assist in identifying the kind of index fund that best suits your goals.
Diversification: Determine the degree of portfolio diversification you desire. Although most index funds provide a wide exposure to the market, some may be more concentrated in particular industries.
Expense Ratio: Take into consideration the expense ratio, which is the yearly charge made by the fund to pay for its running expenses. Over time, lower expense ratios may lead to higher returns.
Tracking Error: Take the tracking error as an example, which indicates how closely the fund tracks the underlying index. A higher tracking error could mean that the fund is not following its index precisely, which could have an impact on your returns.

Taxation on Nifty Next 50 Index Funds

Short-term capital gains (STCG): A 15% tax is applied to gains over Rs. 1 lakh for units held for less than a year.
Long-term Capital Gains (LTCG): The tax rate on long-term gains is 10%. Long-term gains are tax-free up to Rs. 1 lakh annually.

What are the key Highlights of the Nifty Next 50 Index Fund?

A single stock in the Nifty Next 50 Index Fund may have a maximum individual weight of 4.5%.

The Nifty Next 50 Index is rebalanced every two years. By substituting existing companies twice a year using average free-float market cap calculations and deadlines of January 31 and July 31, new companies can be added to the index. Every time stocks are added to or removed from the index, a public notification is sent out four weeks before the change goes into effect.

Conclusion

Investors have the chance to fund future leaders in a variety of industries by investing in the Nifty Next 50 Index Fund. This index fund provides an opportunity to partake in the growth of emerging companies, which have the potential to become tomorrow’s blue-chip stocks, without requiring active stock selection. Before adding this fund to their portfolio, investors should think about their investing objectives and risk tolerance. To make well-informed decisions, as with any investment, extensive research and advice from financial advisors are advised.

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