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HDFC MF launches HDFC NIFTY Next 50 Index Fund – Should you invest?

New Fund Offer, NFO, mutual fund, nifty 50, HDFC mf, mutual fund, Hybrid Equity Fund, equity, debt, open-ended ETF, ETF, exchange-traded fund, Nifty IT TRI, Total Return Index, high risk fundNIFTY Next 50 Index represents 50 companies from NIFTY 100 after excluding the constituents of the NIFTY 50 Index.

HDFC Asset Management Company has announced the launch of New Fund Offer – HDFC NIFTY Next 50 Index Fund — for investors looking for returns that are commensurate with the performance of NIFTY Next 50 Index, subject to tracking error. NIFTY Next 50 Index represents 50 companies from NIFTY 100 after excluding the constituents of the NIFTY 50 Index.

As per the company, HDFC NIFTY Next 50 Index Fund aims to offer an opportunity to benefit from the growth of a basket of ‘tomorrow’s potential NIFTY 50 companies’ in a disciplined manner. The New Fund Offer (NFO) will open for subscription from October 22, 2021, till October 29th, 2021.

The NFO will be suitable for investors looking for a simple yet cost-effective way of investing in ‘Next Top 50’ companies on the listed universe of NSE. The company claims HDFC NIFTY Next 50 Index Fund will offer exposure to the diversified portfolio at sector/ stock level and provide exposure to unique businesses and differentiated businesses as compared to Nifty50.

Krishan Kumar Daga, Senior Fund Manager, HDFC AMC says, “NIFTY Next 50 Index has a favourable risk-reward ratio as compared to NIFTY 50 Index. NIFTY Next 50 has outperformed the NIFTY 50 Index over 19 year period ended September 30, 2021. Out of 75 stocks that were included in the NIFTY 50 index during January 2002 – March 2021, about 51 stocks were from NIFTY Next 50 Index. Thus the Fund offers investors an opportunity to invest in a basket of tomorrow’s potential NIFTY 50 Companies.”

HDFC NIFTY Next 50 Index Fund is an open-ended scheme replicating/ tracking NIFTY Next 50 Index (TRI). The NIFTY Next 50 Index is more diversified with the top 3 sectors’ weight pegged at 58 per cent as compared to 67 per cent for NIFTY 50 and thereby may offer better risk-adjusted returns in long term. The Fund will be managed passively and the investment universe of the fund will be the constituents of the NIFTY Next 50 Index.

Further Navneet Munot, MD and CEO, HDFC AMC says, “Launch of HDFC NIFTY Next 50 Index Fund is a part of our endeavour to expand our product bouquet in the passive space. HDFC AMC has been one of the oldest players in the passive strategies with proven capability.”

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