Bandhan Nifty Next 50 Index Fund NFO: Combination of resilience and growth potential in your portfolio

Bandhan MF has launched a new fund offer (NFO), Bandhan Nifty Next 50 Index Fund. Nifty Next 50 index comprises of 51^st to 100^th companies by market capitalization listed on the National Stock Exchange. While Nifty 50 and Sensex are the two most popular indices among passive investors, low-cost exposure to the broader market (beyond the Top 50) stocks, can produce alphas in your portfolio. All stocks in the Nifty Next 50 Index are large cap stocks, but they are smaller in size than the Nifty 50 stocks. The NFO opened for subscription on 13^th February 2025 and will close on 25^th February 2025. In this article, we will review Bandhan Nifty Next 50 Index Fund.

About Nifty Next 50 Index

Nifty Next 50 Index is constructed by excluding the Nifty 50 stocks from the Nifty 100 (top 100 stocks by market capitalization). The weights of the index constituents are based on free float market capitalization method. The index is rebalanced semi-annually.

Why invest in Nifty Next 50 Index?

• Exposure to large companies with track record or potential of market disruptions e.g. disruptive large cap companies in retail, FMCG, services, e-commerce / q-commerce, tech etc.


• Nifty Next 50 companies can become Nifty 50 companies in the future. In the last 9 years, 24 stocks have advanced to the Nifty 50. Advancement to an index with higher market cap constituents usually comes with valuation rerating.


• Nifty Next 50 combines characteristics of both large cap and mid caps / small caps. Nifty Next 50 outperformed Nifty 50 when the small / midcaps outperformed, and underperformed Nifty 50 when small / midcaps underperformed (see the chart below).
  
  

  

  Source: NSE as on 31^st January 2025



• At the same Nifty Next 50 exhibits the resilience of large caps in volatile markets and limits downside risk of investors in market corrections or bear markets (see the chart below).
  
  

  

  Source: NSE, Advisorkhoj Research as on 31^st January 2025



• Nifty Next 50 has outperformed Nifty 50 and Nifty 100 in terms of 3 year and 5 year rolling returns. The average 3 year rolling returns of Nifty Next 50 TRI was 14.5% versus 12.5% and 12.9% for Nifty 50 TRI and Nifty 100 TRI respectively (see the chart below). The average 5 year rolling returns of Nifty Next 50 TRI was 14.6% versus 12.3% and 12.7% for Nifty 50 TRI and Nifty 100 TRI respectively (see the chart below).
  
  

  

  Source: NSE, Advisorkhoj Research as on 31^st January 2025



• Nifty Next 50 index fund can complement Nifty 50 index funds from a portfolio perspective. Divergent sectors mix of Nifty 50 and Nifty Next 50 can provide superior diversification to your investment portfolio.
  
  

  

  Source: NSE, as on 31^st January 2025

Is this a good time to invest in Nifty Next 50?

• Due to the selling pressure from FIIs, large caps have seen sharper declines compared to mid and small caps.
  
  

  

  Source: NSE, as on 31^st January 2025



• Historically, Nifty Next 50 has bounced back strong whenever it has declined more than 20%.
  
  

  

  Source: NSE, as on 31^st January 2025



• Current market levels may provide attractive entry opportunities in Nifty Next 50 for long term investors.

Who can invest in Bandhan Nifty Next 50 Index Fund?

• Investors looking for capital appreciation over long investment tenures


• Investors with high-risk appetites


• This fund can be suitable for first time investors


• Investors with minimum 5-year investment horizon


• Investors can invest in SIP from their regular monthly savings


• Investors should consult their financial advisors or mutual fund distributors if Bandhan Nifty Next 50 Index Fund is suitable for their investment needs.

Disclaimer:

MUTUAL FUND INVESTMENTS ARE SUBJECT TO MARKET RISKS, READ ALL SCHEME RELATED DOCUMENTS CAREFULLY.

The Disclosures of opinions/in house views/strategy incorporated herein is provided solely to enhance the transparency about the investment strategy / theme of the Scheme and should not be treated as endorsement of the views / opinions or as an investment advice. This document should not be construed as a research report or a recommendation to buy or sell any security. This document has been prepared on the basis of information, which is already available in publicly accessible media or developed through analysis of Bandhan Mutual Fund (formerly known as IDFC Mutual Fund). The information/ views / opinions provided is for informative purpose only and may have ceased to be current by the time it may reach the recipient, which should be taken into account before interpreting this document. The recipient should note and understand that the information provided above may not contain all the material aspects relevant for making an investment decision and the security may or may not continue to form part of the scheme’s portfolio in future. Investors are advised to consult their own investment advisor before making any investment decision in light of their risk appetite, investment goals and horizon. The decision of the Investment Manager may not always be profitable; as such decisions are based on the prevailing market conditions and the understanding of the Investment Manager. Actual market movements may vary from the anticipated trends. This information is subject to change without any prior notice. The Company reserves the right to make modifications and alterations to this statement as may be required from time to time. Neither Bandhan Mutual Fund (formerly known as IDFC Mutual Fund)/ Bandhan Mutual Fund Trustee Limited (formerly IDFC AMC Trustee Company Limited) / Bandhan AMC Limited (formerly IDFC Asset Management Company Limited), its Directors or representatives shall be liable for any damages whether direct or indirect, incidental, punitive special or consequential including lost revenue or lost profits that may arise from or in connection with the use of the information.