Navi mutual fund recently launched the Navi Nifty Next 50 Index Fund NFO, which is an open-ended equity scheme that aims to replicate and track the Nifty Next 50 Index. This index fund will consist of stocks that form part of the underlying index. The fund offers investors an opportunity to diversify through investment in blue-chip companies that offer growth potential at a comparatively lower cost. The NFO is open for investment from 1st January 2022 and closes on 15th January 2022.
Investment objective of the fund
The investment objective of the fund is to invest in stocks of companies that form part of the Nifty Next 50 Index. It aims to achieve returns that are in line with the index returns, subject to tracking error. The scheme will closely track the Nifty Next 50 Index performance without actively selecting stocks for investment.
Why should you apply for the NFO?
Exposure to growth companies: Navi Nifty Next 50 Index Fund allows investors to gain exposure to the growth companies included in Nifty Next 50. As per the trend observed in the past 19 years, nearly 51 out of the 75 stocks included in the Nifty 50 index are known to have come from the Nifty Next 50 index.
Low-cost investing: Since this is a passively managed fund, it is expected to have comparatively lower expense ratios, thereby allowing larger benefits in the hands of investors.
Portfolio diversification: With exposure to large-cap growth stocks, investors can gain appropriate levels of portfolio diversification through this scheme. It allows exposure to stocks without requiring investors to conduct independent research to pick individual stocks for investment.
Historical performance of Nifty Next 50 compared to Nifty 50 and Nifty 100: For investors to have an idea around the potential returns that can be expected from Axis Nifty Next 50 NFO, here are the historical percentage returns of Nifty Next 50 compared to other Nifty indices:
| 2020 | 2019 | 2017 | |
| Nifty Next 50 | 16% | 2% | 46% |
| Nifty 50 | 16% | 14% | 30% |
| Nifty 100 | 16% | 12% | 33% |
About the benchmark index
The Nifty Next 50 index comprises the 50 companies from Nifty 100 that remain after excluding the Nifty 50 companies. It is made up of a well-diversified portfolio of stocks from across different sectors without being concentrated on any one sector. The index is derived through a free-float market capitalization method. Therefore, the index level is reflective of the total free-float market value of all the securities that are part of the index in comparison to a selected base market capitalization value.
Fund details
| Scheme name | Navi Nifty Next 50 Index Fund |
| Type of Scheme | An open-ended index fund replicating /tracking Nifty Next 50 Index |
| Category of the scheme | Index fund |
| Benchmark | Nifty Next 50 Index TRI |
| Plan options | Regular & Direct plan |
| Fund Manager | Mr Girish Raj |
| Exit Load | NIL |
| Minimum Investment | Rs. 500 and in multiples of Re 1/- thereafter. Additional purchase Rs. 100/- and in multiples of Re. 1 thereafter. |
| Expense Ratio | Proposed expense ratio of 0.12% |
| NFO Period | 1 January 2022 – 15 January 2022 |
Where can you invest in the NFO?Head over to the Fisdom App to invest in this NFO.
