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Bandhan Mutual Fund has launched Bandhan Nifty Next 50 Index Fund , a passive fund that will track the Nifty Next 50 Index. The new fund offer (NFO) opened for subscription on February 13, 2025, and will remain open until February 25, 2025.
The fund aims to replicate the performance of the Nifty Next 50 Index by investing in its constituent stocks in the same proportion.
Bandhan Nifty Next 50 Index Fund NFO snapshot
| NFO period | February 13 - 25, 2025 |
| Benchmark | Nifty Next 50 TRI |
| Fund manager | Nemish Sheth |
| Exit load | 0.25 per cent if redeemed within 15 days; Nil after 15 days |
| Minimum investment | Rs 1,000 (Lumpsum), Rs 100 (SIP) |
| Tax treatment |
•If sold within a year, gains will be taxed at 20 per cent
•If sold after a year, gains beyond Rs 1.25 lakh will be taxed at 12.5 per cent |
About the Nifty Next 50 Index
The index comprises the 50 largest companies by market capitalisation, after the Nifty 50 constituents within the Nifty 100. Funds tracking this index provide an opportunity to gain exposure to companies that are close to joining the Nifty 50, as 24 companies have made the leap in the last nine years.
Diversification
Unlike the Nifty 50, where the top five stocks account for 39 per cent of the index and the top 10 make up 56 per cent, the Nifty Next 50 is less concentrated.
The top five stocks in Nifty Next 50 make up nearly 20 per cent of the index, while the top 10 stocks account for around 35 per cent.
Top holdings of Nifty Next 50
| Stock | Weight (%) |
|---|---|
| Zomato | 6.74 |
| InterGlobe Aviation | 3.74 |
| Jio Financial Services | 3.50 |
| Vedanta | 3.30 |
| Hindustan Aeronautics | 3.30 |
| Data as of January 31, 2025 | |
Returns
Over the past 10 years, the Nifty Next 50 Index has generally outperformed its more popular counterpart, the Nifty 50, in terms of five-year rolling returns, surpassing it 65 per cent of the time. However, this performance has come with higher volatility and more frequent negative return periods. Looking closely at shorter time periods, Nifty Next 50 posted negative returns 24 per cent of the time, compared to Nifty 50's 15.3 per cent on a one-year basis.
Should you invest in Bandhan Nifty Next 50 Index Fund?
Consider investing if you want exposure to potential future large-cap leaders, have a long-term investment horizon and can tolerate higher short-term volatility.
That said, there are already 13 index funds tracking the Nifty Next 50, collectively managing over Rs 17,000 crore of investors' money). As with any index fund, investors should carefully evaluate the expense ratio and tracking efficiency before making an investment decision.
Also read: Ask these three questions before investing in an NFO
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