SBI Mutual Fund has introduced Nifty Next 50 Index Fund, an index fund that will track Nifty Next 50 Index.
The NFO period of the fund will close on 11 May.
Launched on 24 December 1996, the Nifty Next 50 Index represents 50 companies from NIFTY 100 after excluding the NIFTY 50 companies. The index is rebalanced semi-annually. According to the fund house, the Nifty Next 50 Index companies have the potential to be market leaders in the near future.
Portfolio
NIFTY Next 50 Index is well-diversified and has exposure across different sectors. However, the exposure to one sector is very minimal.
If we talk about the top 10 stocks, these ten stocks make up 31.52% of the index. The weight of the individual stock ranges from 2.75% to 3.82%.
Performance
On an annualised point-to-point performance, the index has given nearly 63% in the last year, 7.25% in three years and 14.15% in the last five years as of 31 March.
If we consider the value of monthly investment of Rs. 10,000, the value of the investment in one year would have increased to Rs.1.52 lakhs from an initial investment of Rs.1.20 lakhs. If you had invested for three years, your investment would have gone up to Rs.4.51 lakhs from an investment of Rs.3.60 lakhs.
Benefits of the Fund
As the index is a part of the Nifty 100, you get exposure to large caps.
It allows you to invest in future market leaders.
The index is well diversified and is exposed to various sectors.
These companies are relatively less volatile than the mid cap or small-cap stocks.
There is no scope for individual biases as the fund passively tracks the index.
As it is a passive fund, the expense ratio of the fund will be relatively low.
Fund Facts
The initial minimum investment amount is Rs.5,000 and in multiples of Re.1 thereafter. For an additional purchase, the minimum investment amount is Rs.1,000 and in multiples of Re.1 thereafter.
An exit load of 1% is applicable if investors redeem the units on or before one year from the date of allotment.
As per the fund house, the fund will invest 95% to 100% of the fund’s asset in the securities covered by Nifty Next 50 Index. The fund can invest up to 5% in money market instruments.
Daily, weekly, monthly, quarterly, semi-annual and annual SIP plans are available. The minimum SIP amount for the monthly plan is Rs.1,000 for minimum of six months or a minimum SIP amount of Rs.500 for minimum of 12 months.
Mr. Raviprakash Sharma will manage the fund. He also manages other passive funds.
Sources:
https://www.sbimf.com/en-us/sbi-nifty-next-50-index-fund
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