SBI Nifty Next 50 Index Fund :An index fund of SBI Mutual Fund has proved its investment strategy right by giving excellent returns to investors within a few years of its launch. The name of this scheme of the country’s biggest fund house is SBI Nifty Next 50 Index Fund. This open ended equity index fund has earned more than 70% profit in the last one year, while more than doubling the investment made at the time of launch. This scheme, which started on May 19, 2021, is a little more than 3 years old. Given the success of this index fund, should you also invest in it? We will discuss this question further, but first let us know the special things related to the scheme.
Investment Strategy of SBI Nifty Next 50 Index Fund
Being an index fund, SBI Nifty Next 50 Index Fund follows the strategy of passive investment. This means that the fund manager invests in the stocks of Nifty Next 50 Total Return Index (Nifty Next 50 TRI) in the same proportion. They try to ensure that the returns of the fund are equal to the benchmark index. However, due to changes in the index from time to time, the fund may temporarily include some stocks which are not part of the index. It is the responsibility of the fund manager to correct this difference within 7 days. SBI Nifty Next 50 Index Fund also tries to achieve returns equal to the index by investing in stocks included in its benchmark index, Nifty Next 50 Index. The amount invested in this scheme is invested in the exact proportion in which it is given a place in the Nifty Next 50 index.
Also read: Top 5 Multi Asset Funds: Top 5 Multi Asset Funds gave returns up to 29% in 5 years, good performance even in 3 and 10 years, what is their biggest feature
Past Performance of SBI Nifty Next 50 Index Fund
1 year return: 70.29% (CAGR)
3 year return: 22.01% (CAGR)
From start (19 May 2021): 24.29% (CAGR)
Fund value of investment of Rs 1 lakh
- In 1 year: Rs 1,70,790
- In 3 years: Rs 1,81,740
- From start (19th May 2021): Rs 2,08,100 (Rs 2.08 lakh)
The 1-year Compounded Annual Growth Rate (CAGR) of SBI Nifty Next 50 Index Fund has been 70.29%, which can be considered quite excellent. The fund has given very good returns in the last 3 years and the period since inception till now. To achieve this return, the stocks in which the fund has invested following the index are as follows:
Also read: SIP Investment Tips: Want to earn huge income from mutual fund SIP? Keep these 5 things in mind, a big corpus will be created in a short time
Top 10 Holdings of SBI Nifty Next 50 Index Fund
-
Vedanta Ltd.: 4.25%
-
Hindustan Aeronautics Ltd.: 4.10%
-
InterGlobe Aviation Ltd.: 4.04%
-
Tata Power Company Ltd.: 3.98%
-
Power Finance Corporation Ltd.: 3.47%
-
Divi’s Laboratories Ltd.: 3.38%
-
REC Ltd.: 3.38%
-
Indian Oil Corporation Ltd.: 3.30%
-
Cholamandalam Investment & Finance Co. Ltd.: 3.27%
-
TVS Motor Company Ltd.: 3.26%
Also read: HDFC MF’s scheme to more than double money in 3 years, investors’ funds increased 6.6 times in 10 years
Risk level and assets under management
The risk level of SBI Nifty Next 50 Index Fund is very high. As of September 30, 2024, the asset under management (AUM) of this fund was Rs 1,422.58 crore. The expense ratio of the fund is 0.77% for the regular plan and 0.32% for the direct plan. The minimum lump sum investment in the scheme is Rs 5,000, additional lump sum investment is Rs 1,000 and minimum monthly SIP investment is Rs 500.
Also read: Gold ETF vs Digital Gold: What is wise to buy this Dhanteras, what is better between gold ETF and digital gold?
Should you invest?
SBI Nifty Next 50 Index Fund has performed well in the last few years. In this sense, this fund is suitable for those investors who want to create wealth by investing for the long term and are prepared to take the risk associated with investing in equity funds. However, given the high risk level of the fund, investors must consider their risk appetite before investing in it. Investing in equity funds should be done only when you are ready to invest for a long term i.e. 5 years or more. If you are looking for short term investment options, it is better to stay away from equity index funds.
(Disclaimer: The purpose of this article is only to provide information and not to advise investment in any fund. The past performance of mutual funds cannot be considered as a guarantee of future returns. Any investment decision should be taken based on the opinion of your investment advisor. Just take it.)
