Tata Nifty Next 50 Index Fund launched: Should you invest?
What's the story
Tata Asset Management has launched a new passive investment option, the Tata Nifty Next 50 Index Fund. The open-ended scheme seeks to replicate the performance of the Nifty Next 50 Total Return Index (TRI). The New Fund Offer (NFO) for this fund is open from today to September 26, and requires a minimum investment of ₹5,000. So, should you invest? Let's see.
Investment strategy
Fund gives exposure to companies ranked 51-100 by market cap
The Tata Nifty Next 50 Index Fund primarily invests in firms ranked 51-100 by free-float market capitalization. This means it focuses on large-cap companies with potential for growth, which could eventually make their way into the Nifty 50. The fund gives investors exposure to a range of sectors including power, FMCG, healthcare, real estate and specialty chemicals.
Historical returns
Nifty Next 50 TRI has outperformed Nifty 50 TRI
Over the last decade, the Nifty Next 50 TRI has delivered an impressive annual return of around 15.94%. This is even better than the traditional Nifty 50 TRI's average return of about 14.09%. The fund does not charge any entry load but there is a nominal exit fee of 0.25% if you redeem your units within 15 days from allotment date.