NFO Pick – (Tata Nifty Next 50 Index Fund NFO)

16 Sep 2025 , 01:48 PM

WHERE WILL THE TATA NIFTY NEXT 50 INDEX FUND INVEST?

Tata Nifty Next 50 Index Fund will invest in a portfolio that exactly mirrors the Nifty Next 50 index components. Even the proportion of stocks will be maintained same as the index so it reflects the Nifty Next 50 Index TRI returns as closely as possible. It is an equity index fund, so there will be no element of stock selection; just mirroring the underlying index. The Nifty Next 50 index is the Nifty 100 minus the Nifty 50 components.

What is so special about the Nifty Next 50 Index? It is composed of stocks that have a higher growth rate than Nifty stocks and have the potential to become Nifty stocks over time. Quite often, they also offer valuation comfort compared to the Nifty index. The Nifty Next 50 Index also comprises unique themes like green energy, ecommerce, life style brands, chemicals, real estate etc, which is normally not available on the Nifty.

WHO SHOULD INVEST IN THE TATA NIFTY NEXT 50 INDEX FUND?

The following category of investments must closely look at investing in the Tata Nifty Next 50 Index fund.

• Long term who are looking to diversify their large cap risk by including more of high growth companies with unique business models.
• Investors who prefer to participate in equities through a passive approach by indirectly participating in the index, rather than get into stock selection.
• Investors who are looking at access to new and emerging business ideas, apart from very cost-effective access to equity investing.
• Investors who are patient enough to ride the cycles in the market through the SIP route, so as to best leverage the merits of rupee cost averaging.

Let us now turn to how these Nifty Next 50 index funds / ETFs have performed in India over a longer time frame.

HOW NIFTY NEXT-50 INDEX FUNDS PERFORMED IN INDIA

Nifty Next-50 Index funds in India manage ₹27,361 Crore AUM across 26 funds. For our ranking, we have only considered top-10 funds with 5-year track record. Here are the top-10 Nifty Next-50 Index funds based on 5-year CAGR returns (Regular Plans).

Scheme Name	1-Year (%) Returns	3-Year (%) Returns	5-Year (%) Returns	Daily AUM (₹ in Crore)
ABSL Nifty Next 50 ETF	-7.80	16.15	20.90	1,705.85
ABSL Nifty Next 50 Index Fund	-7.74	16.19	20.84	N.A.
Axis Nifty Next 50 Index Fund	-7.78	16.18	20.83	139.94
Bajaj Finserv Nifty Next 50 Index Fund	-7.85	16.13	20.73	2,581.80
Bandhan Nifty Next 50 Index Fund	-7.90	16.07	20.68	6,636.43
DSP Nifty Next 50 Index Fund	-7.81	16.03	20.51	818.34
Edelweiss Nifty Next 50 Index Fund	-8.44	15.52	20.13	1,096.03
Groww Nifty Next 50 ETF	-8.39	15.37	19.95	N.A.
Groww Nifty Next 50 Index Fund	-8.65	15.36	19.91	7,949.27
HDFC Nifty NEXT 50 ETF	-8.73	15.10	19.70	139.17

Data Source: AMFI

Nifty Next 50 Index Funds have generated average 1-year return of -8.31%, 3-year CAGR returns of 15.56%, and 5-year CAGR returns of 20.27%. The 5-year return may look inflated due to the COVID base. Return dispersion is very low over all time periods due to the homogeneous nature of the funds. That makes fund selection a lot easier.

GLANCE AT TATA NIFTY NEXT 50 INDEX FUND NFO

Here are key details of the Tata Nifty Next 50 Index Fund NFO.

• NFO opens on September 12, 2025 and closes on September 26, 2025. This open-ended Fund will invest in a portfolio that mirrors in the Nifty Next 50 Index.
• On the risk-o-meter, Tata Nifty Next 50 Index Fund is classified as “High Risk,” due to its substantial exposure to equity. Also, tracking risk is a major risk for index funds.
• The Tata Nifty Next 50 Index Fund NFO is best suited to investors looking at long term returns, through a passive approach to equities, through the SIP route.
• The benchmark for the fund will be the Nifty Next 50 Index TRI. Nitin Sharma and Rakesh Prajapati will manage the index-based asset allocation and portfolio shift decisions.
• Minimum application amount in NFO is ₹5,000 and in multiples of ₹1 thereof. The fund structure will be compatible with SIP, STP, and SWP too.
• There will be an exit load of 0.25% of the redemption value if the fund is redeemed within 15 days of the deemed date of allotment. There is no exit load after that.

Tata Nifty Next 50 Index Fund will be classified as an equity fund for tax purposes. Short term capital gains (STCG) will be taxed at 20.8% (including cess). Long term capital gains (LTCG) will be taxed at 15%, after a base tax-free LTCG limit of ₹1.25 Lakhs per fiscal year.