Sometimes it can be beneficial to invest in the second best rather than in the best.Talking of equity markets, while Nifty is composed of 50 largest companies by market capitalization, its junior sibling the Nifty Next 50 (also known as Nifty Junior) is composed of the next largest 50 companies.
Of course, we all know that one should buy at low and sell at high. Nifty Next 50 index does exactly that- it buys at low and sells at high: when a company falls from the top Nifty 50 index it enters the Nifty Next 50 index (buy low) whereas when a company in the Nifty Next 50 outperforms it moves out into Nifty 50 (sell high). However, the top most index (Nifty 50) buys high and sells low (when a company under-performs it exits the Nifty 50 and makes way for a company from the Nifty Next 50/Nifty Junior index that outperformed.
Mutual funds tracking such indices are called passive funds that just replicate the index. However it's not entirely passive investing as the indices are reshuffled/rejigged periodically based on the companies' performance, meaning it's a semi-active/semi-passive investing.
The active mutual funds compare their returns with different indices but none dares to compare it with the Nifty Next 50 Index (Nifty Junior). If you are buying an equity mutual fund and looking for a well diversified fund containing quality largecap stocks, perhaps this is the only fund that you may need- just buy and then forget. You may check the returns for yourself. Quality with performance.
Compare for yourself: Nifty 50 index returned 78.36% from Feb. 15 2013 through Feb.14 2018 whereas the Nifty Next 50/Nifty Junior index returned 153.64% during the same period, even beating many of the actively managed mutual funds (and that too with a lower expense ratio). Junior is the new Senior.
Perhaps none of the agents/fund advisers would recommend you such index funds because they get higher margins when they sell an actively managed fund to you (which have a higher expense ratio that we investors pay out of our pockets thereby reducing our returns).
Buys low, sells high, offers high returns, provides diversification, contains quality largecaps and has low-expense ratio. Invest in the second best index!
Some mutual funds/ETFs tracking the Nifty Next 50 (Nifty Junior Index):
- ICICI Prudential Nifty Next 50 Index Fund
- IDBI Nifty Junior Index Fund
- Reliance ETF Junior BeES
Of course, we all know that one should buy at low and sell at high. Nifty Next 50 index does exactly that- it buys at low and sells at high: when a company falls from the top Nifty 50 index it enters the Nifty Next 50 index (buy low) whereas when a company in the Nifty Next 50 outperforms it moves out into Nifty 50 (sell high). However, the top most index (Nifty 50) buys high and sells low (when a company under-performs it exits the Nifty 50 and makes way for a company from the Nifty Next 50/Nifty Junior index that outperformed.
Mutual funds tracking such indices are called passive funds that just replicate the index. However it's not entirely passive investing as the indices are reshuffled/rejigged periodically based on the companies' performance, meaning it's a semi-active/semi-passive investing.
The active mutual funds compare their returns with different indices but none dares to compare it with the Nifty Next 50 Index (Nifty Junior). If you are buying an equity mutual fund and looking for a well diversified fund containing quality largecap stocks, perhaps this is the only fund that you may need- just buy and then forget. You may check the returns for yourself. Quality with performance.
Compare for yourself: Nifty 50 index returned 78.36% from Feb. 15 2013 through Feb.14 2018 whereas the Nifty Next 50/Nifty Junior index returned 153.64% during the same period, even beating many of the actively managed mutual funds (and that too with a lower expense ratio). Junior is the new Senior.
Perhaps none of the agents/fund advisers would recommend you such index funds because they get higher margins when they sell an actively managed fund to you (which have a higher expense ratio that we investors pay out of our pockets thereby reducing our returns).
Buys low, sells high, offers high returns, provides diversification, contains quality largecaps and has low-expense ratio. Invest in the second best index!
Some mutual funds/ETFs tracking the Nifty Next 50 (Nifty Junior Index):
- ICICI Prudential Nifty Next 50 Index Fund
- IDBI Nifty Junior Index Fund
- Reliance ETF Junior BeES
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