Fund of Fortnight

Every fortnight, we recommend one open-ended equity diversified fund that has the best potential of returns for the next one year considering its constituents remain the same.[EasyDNNnews:PaidContentStart]

Reason for recommendation
The NIFTY Next 50 Index has emerged as one of the most attractive long-term opportunities currently in the Indian equity landscape, largely because it combines strong earnings visibility with compelling valuations. Although the index houses many of India’s fastest-growing emerging giants, it currently trades at a lower price-to-earnings ratio than the NIFTY 50. Historically, whenever this valuation gap has appeared, the NIFTY Next 50 has delivered significantly superior five- and ten-year forward returns. With this favourable pricing and improving growth visibility, the UTI Nifty Next 50 Index Fund becomes a noteworthy vehicle for investors seeking long-term wealth creation. UTI Nifty Next 50 Index Fund Direct Growth is an index-style exposure to the Nifty Next 50 universe, which represents companies that sit just below the Nifty 50 in terms of market capitalisation.

This makes the fund structurally more growth-oriented and more volatile than a plain Large-Cap index fund. Its sector mix further enhances its appeal. Financials form the largest portion of the portfolio at 17.25 per cent, followed by Energy, Capital Goods, Consumer Staples and Automobiles. This allocation captures India’s structural growth themes, balancing cyclical drivers with defensive stability. The fund’s top holdings underline this balanced approach. Companies like Hindustan Aeronautics, Divi’s Laboratories, Vedanta, TVS Motor and Cholamandalam Investment offer a blend of Defence, pharma, natural resources, mobility and retail lending exposure—sectors expected to shape India’s next decade of growth.In essence, the UTI Nifty Next 50 Index Fund stands out for its long-term performance, solid diversification and exposure to India’s next generation of large caps. From a suitability perspective, this fund is better aligned for investors with a multi-year horizon who already have core large-cap exposure and are looking to add a satellite allocation to the ‘next line’ of potential blue chips. Short-term volatility, periods of underperformance versus Nifty 50, and sharper drawdowns during risk-off phases should be expected. It fits best for investors who want systematic exposure to potential future large-caps without taking single-stock risk.

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