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HDFC Mutual Fund launches Nifty Next 50 index fund

HDFC AMC has been betting big on passive funds as it recently filed papers for nine exchange-traded funds (ETFs) with the Securities and Exchange Board of India.Premium
HDFC AMC has been betting big on passive funds as it recently filed papers for nine exchange-traded funds (ETFs) with the Securities and Exchange Board of India.

  • The top stocks in the Nifty Next 50 index as per weightege are Info Edge (India) Ltd. (4.03%), Avenue Supermarts Ltd. (3.80%), Apollo Hospitals Enterprise Ltd (3.66%), ICICI Lombard General Insurance Company Ltd. (3.29%) and Adani Enterprises Ltd. (3.27%)

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NEW DELHI: HDFC Asset Management Company has launched a new fund offer (NFO) HDFC NIFTY Next 50 Index Fund for investors looking for returns that are commensurate with the performance of Nifty Next 50 index.

Nifty Next 50 index represents 50 companies from Nifty 100 after excluding the constituents of Nifty 50 Index.

As per the fund house, the Nifty Next 50 Index is more diversified with top three sectors’ weight pegged at 58% compared with 67% for Nifty 50, and thereby may offer better risk adjusted returns in long term.

The NFO will open on 22 October and close on 29 October.

Krishan Kumar Daga, senior fund manager, HDFC AMC, said, “Nifty Next 50 Index has favourable risk-reward ratio compared with Nifty 50 Index. Nifty Next 50 has outperformed Nifty 50 Index over 19-year period ended 30 September. Out of 75 stocks that were included in 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 basket of tomorrow’s potential Nifty 50 companies."

Nifty Next 50 Index is computed using free float market capitalisation method wherein the level of the index reflects total free float market value of all the stocks in the index relative to a particular base market capitalization value.

The top stocks in the index as per weightege are Info Edge (India) Ltd. (4.03%), Avenue Supermarts Ltd. (3.80%), Apollo Hospitals Enterprise Ltd (3.66%), ICICI Lombard General Insurance Company Ltd. (3.29%) and Adani Enterprises Ltd. (3.27%).

Navneet Munot, MD and CEO, HDFC AMC, said, “Launch of HDFC NIFTY Next 50 Index Fund is a part of our endeavor 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."

HDFC AMC has been betting big on passive funds as it recently filed papers for nine exchange-traded funds (ETFs) with the Securities and Exchange Board of India.

The AMC had applied for the following ETFs: Nifty Growth Sectors 15, Nifty IT, Nifty Next 50, Nifty Private Bank, Nifty100 Low Volatility 30, Nifty100 Quality 30, Nifty200 Momentum 30, HDFC NV 20 and HDFC Nifty 100.

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