Nifty Next 50 Index Fund: How Beneficial is Investing with a 17.1% 3-Year Return?

For investors looking to diversify beyond large-cap stocks while keeping risk moderate, the Nifty Next 50 Index Fund emerges as a promising option. Experts note that this index is currently cheaper than the Nifty 50, and its constituent companies are witnessing rapid profit growth. Over the past three years, it has outperformed the Nifty 50, making it an attractive choice for long-term investors.

Performance Snapshot

• 1-Year Return: Nifty Next 50 fell 2.27%, while Nifty 50 gained 9.6%.
• 3-Year Return: Nifty Next 50 delivered an impressive 17.1%, surpassing Nifty 50’s 13.4%.

Valuation Overview

The PE ratio of Nifty Next 50 is 20.66, significantly below its 5-year average of 26.01. For comparison, Nifty 50 trades at a PE of 22.64, making Nifty Next 50 a more affordable alternative. Profit growth over the past year also favors Nifty Next 50, with 9.7% earnings growth versus Nifty 50’s 5.7%.

Risk Factor

Nifty Next 50 is less concentrated, with the top 10 stocks accounting for just 32% of the portfolio, compared to 55% in Nifty 50. This means risk is more evenly spread, reducing the impact of volatility from any single stock.

Investment Advice

Market experts recommend a staggered investment approach instead of putting in all capital at once. Gradually investing over the next three months can help mitigate market fluctuations while maximizing potential gains.

Disclaimer: The performance figures and advice reflect market trends and expert opinions. Investors should consult certified financial advisors before making investment decisions.