HDFC Nifty Next 50 Index Fund is an open-ended fund which will replicate or track the Nifty Next 50 Index.
| Good to know What is an index fund? It is a mutual fund that tracks or replicates an index, such as the Nifty50, or the Sensex. An index fund provides broad exposure to the markets and has a low expense ratio and portfolio turnover. It basically follows a passive style of investing. |
Investment objective
The fund offers an opportunity to investors to benefit from tomorrow’s potential Nifty 50 companies. It tracks the Nifty Next 50 Index, from which the majority of companies have joined the benchmark Nifty50 Index over the years. Out of 75 stocks included in the NIFTY 50 index between January 2002 and March 2021, around 51 stocks were from the NIFTY Next 50 Index.
So, through exposure to this index fund, investors can generate better risk adjusted returns in the long-term.
It will also provide exposure to the diversified portfolio at the sector and stock levels through unique and differentiated businesses. For instance, the Nifty Next 50 Index is more diversified, with the top three sectors accounting for 58% of the weightage. In comparison, the top three stocks in the Nifty50 Index hold 67% weightage. Also, Nifty Next 50 has outperformed the Nifty 50 Index over the 19 year period ended September 30, 2021 on a CAGR basis.
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Asset allocation
| Instrument | Allocation (% of total assets) | Risk profile | |
| Minimum | Maximum | ||
| Securities covered by Nifty Next 50 Index | 95 | 100 | Very high |
| Debt and money market instruments | 0 | 5 | Low to medium |
Scheme details
| Name | HDFC Nifty Next 50 Index Fund |
| Type | An open-ended fund which tracks the Nifty Next 50 Index. |
| Category | Equity |
| Benchmark | Nifty Next 50 |
| Entry/exit load | Entry: Nil Exit Load: Nil |
| Fund Manager | Mr. Krishan Kumar Daga |
| Minimum application amount | ₹5,000 and any amount thereafter |
| Expense ratio | Up to 1% |
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| This product is suitable for investors who are seeking*: | Riskometer |
| -Returns that are commensurate (before fees and expenses) with the performance of the NIFTY Next 50 Index over the long term, subject to tracking error. -Investment in securities covered by the NIFTY Next 50 Index. |
*Investors should consult their financial advisors if in doubt about whether the product is suitable for them.
Note: The above information has been sourced from the Scheme Information Document provided by HDFC Asset Management Company. To read the entire document, click here.
Disclaimer: The above article is purely academic in nature and aims to provide knowledge about basic trading concepts & should not be construed as an opinion or advice to invest or trade. RKSV Securities India Private Limited (brand name Upstox) is the distributor of the mutual fund. Mutual fund investments are subject to market risks; please read all the related documents and/or consult your investment advisor before investing. Past performance of an investment asset does not guarantee future returns.
Mutual fund investments are subject to market risks, read all scheme related documents carefully.