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Nippon India Nifty 50 Value 20 Index Fund NFO – 19% annualized returns since inception – Should you invest?

10 Recommended Diwali Stock Picks for 2020-2021 - Price chart of ICICI BankNippon India Nifty 50 Value 20 Index Fund NFO – Review


Nippon India Mutual Fund is launching Nifty 50 Value 20 Index Fund that would open for subscription on 4th February, 2021. Nippon India Nifty 50 Value 20 Index Fund would invest in the NIFTY 50 Value 20 Index which has 20 most liquid value blue chip stocks listed on NSE. This index has delivered 19% annualized returns in the last 11 years since inception. Should you invest in Nippon India Nifty 50 Value 20 Index Fund NFO? What are the risk factors in this mutual fund?

Also Read: Top 15 Best Mutual Funds for 2021

Issue details of Nippon India Nifty 50 Value 20 Index Fund NFO

This is an open-ended index fund replicating / tracking Nifty 50 Value 20 Index. Here are the NFO issue details.

Nippon India NIFTY50 Value 20 Index Fund NFO – Issue Details
Scheme Opens 04-Feb-21
Scheme Closes 12-Feb-21
Scheme reopens for continous purchase/sale 26-Feb-21
Minimum investment (Lumpsump) Rs 5,000
Minimum investment (SIP) Rs 1,000 for 6 months
NAV of the fund Rs 10 during NFO period
Entry Load Nil
Exit Load Nil
Risk Very High Risk
Max Total expense Ratio (TER) 1.00%
Benchmark Nifty 50 Value 20 TRI

Download Nippon India Nifty 50 Value 20 Index Fund SID

What is the investment objective of the Nippon India Nifty 50 Value 20 Index Fund?

The investment objective of the scheme is to provide investment returns closely corresponding to the total returns of the securities as represented by the Nifty 50 Value 20 Index before expenses, subject to tracking errors.

However, there can be no assurance or guarantee that the investment objective of the Scheme will be achieved

What is the allocation pattern in this index fund?

Here is how the index fund would invest:

Type of instruments Min % Max % Risk Profile
Securities constituting Nifty 50 Value 20 Index 95% 100% Medium to High
Money market instruments and other debt instruments 0% 5% Low to Medium

What does NIFTY100 Nifty 50 Value 20 Index contain?

The NIFTY50 Value 20 Index is designed to reflect the behavior and performance of a diversified portfolio of value companies forming a part of NIFTY 50 Index. It consists of the 20 most liquid value blue chip companies listed on NSE. The NIFTY50 Value 20 Index has been computed historically from January 01, 2009.

Here is the list and their weightage in this index by sector and top constituents as of now.

Nippon India Nifty 50 Value 20 Index Fund - sector wise composition

Nippon India Nifty 50 Value 20 Index Fund - top 10 stocks and their weightage

Why to invest in Nippon India Nifty 50 Value 20 Index Fund?

Here are a few reasons to invest in such index funds.

1) It is unique fund that invests in index which has 20 most liquid blue chip companies that are forming part of NIFTY50.

2) This index has outperformed in the last 1 year, 5 years and since inception.

Some key risk factors you should consider before you invest in such funds

One should consider some of these risk factors / negative factors before investing.

1) This index fund invests in Value 20 Index fund of NIFTY50. The scope of the index is limited to 20 stocks.

2) It invests up to 5% in debt instruments. There is interest rate risk and risk of downgrade of corporate credit rating.

3) Investors should not assume any guaranteed returns from such index schemes.

4) Investors should read the SID / KIM / prospectus before investing in such mutual funds.

Also Read: 10 Mutual Fund Investment Plans for steady income

How is the Performance of Nifty 50 Value 20 Index Fund?

Now, let us look at the performance of the underlying index where this fund would going to invest. Total returns include dividends, interest and rights received by the shareholders (if any).

Performance of Nifty 50 Value 20 Index Fund 2011-2021

Here is the performance chart of the NAV value movement of this index since inception.

Performance chart - Nifty 50 Value 20 Index Fund 2011-2021

Should you invest in Nippon India Nifty 50 Value 20 Index Fund NFO?

Nippon India NIFTY 50 Value 20 Index fund invests 20 most liquid blue chip companies in India that are part of NIFTY50. This index has outperformed and delivered 19% annualized return since inception, 16% annualized returns in last 5 years and 28% returns in last 1 year. High risk investors can invest in such index funds. Moderate to low risk investors should stay away from such investments.

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Suresh KP

6 thoughts on “Nippon India Nifty 50 Value 20 Index Fund NFO – 19% annualized returns since inception – Should you invest?”

  1. Sir,
    Why only “high risk investors” should invest in this scheme. It is an index fund and that too, of the most valued 20 stocks out of Nifty 50 companies. What else would one want. It is a basket of 20 best companies in India and it has given historically also great returns/results.
    In fact, any index fund, for that matter, has less risk as compared with individual stocks and this index fund is for ‘creme de la creme’ companies.

    1. Hello Kamal, Though this fund invests in 20 liquid funds that are part of NIFTY50, it invests in EQUITY SHARES. Equity investments are only for high risk investors as there are chances that capital can get eroded. One cannot give guarantee that capital is protected when investing in equity. Hence this is for HIGH RISK investors only

  2. Hi Suresh,
    Can u pls share any existing MF which are following the same index or similar sort of index as this new NFO will follow and also share the performance of these MF.
    Thanks

    1. Hello vivek, There are no funds which are investing in this index. Index past performance can be considered here (thought past performance may not repeat in future) if you want to check how such funds can perform in future

      1. I believe there are couple of ETFs — one from ICICI and another from Kotak — that provide an instrument for investing in the NV20 index.

        1. Hello AI, There are two ETFs that are investing in this index i.e. Nippon ETF NV20 ETF and ICICI NV20 ETF. Since this fund invests in underlying index and past performance is known, there is no point in understanding other ETFs/Funds (except for academic interest)

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