Navi Mutual Fund on Monday announced the launch of Navi Nifty Next 50 Index Fund, which is an open-ended equity scheme that will replicate the Nifty Next 50 Index.
The fund has an expense ratio of 0.12% for its direct plan, which is the lowest compared to any other similar schemes in the passive funds category as of date.
The New Fund Offer (NFO) opened on 1 January 2022 and will close for subscriptions on 15 January. Navi MF had launched Navi Nifty 50 Index Fund in July last year that had collected over ₹100 crore in its NFO.
The company said Navi Nifty Next 50 Fund offers exposure to the Nifty 50 companies of the future, adding that out of the 75 stocks that graduated to the Nifty 50 Index in the last 19 years, 51 have been from the Nifty Next 50 Index. The Nifty Next 50 index CAGR over 1-year, 5-year and 10-year investment horizon stands at are 57.7%, 14.4% and 17.1%, respectively, the company said in its statement. “Moreover, investing in a combination of Nifty Next 50 & Nifty 50 offers a higher risk adjusted return than investing in Nifty 50 alone, over the long term,” it said
The fund offers investors exposure to businesses offering financial services beyond traditional banks, such as asset management, credit card and general insurance, companies focused on a cleaner and renewable energy source and businesses in the healthcare sector.
Commenting on the launch, a company spokesperson said investors typically top-up their Nifty 50 fund investments with Nifty Next 50 funds to achieve a better-blended large-cap portfolio and this fund can be expected to deliver better risk-adjusted returns compared to the Nifty 50 fund alone.
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