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What is Nifty Next 50 Junior Bees & How to Invest in Junior Bees?
Table of Contents
- Introduction to India's Safest Indices
- The Nifty Next 50: A Hidden Gem
- Why Invest in the Nifty Next 50?
- Risk and Reward: Comparing Nifty 50 and Nifty Next 50
- Understanding the Risk-Reward Ratio
- Investment Options for Nifty Next 50
- Why Choose ETFs Over Index Funds?
- Benefits of Investing in Junior Bees
- Performance of Junior Bees Compared to Nifty 50
- Top Holdings in Junior Bees
- How to Invest in Junior Bees via Zerodha
- Conclusion
Introduction to India's Safest Indices
When asked about India's safest index, most people would instantly point to the Nifty 50. This is indeed a correct answer. However, there is another index that is almost as safe and offers substantial returns. Can you guess what it is? If you have an idea, feel free to comment. This video will be highly informative, focusing on an index that is as safe as the Nifty 50 but also provides fantastic returns.
The Nifty Next 50: A Hidden Gem
While the Nifty 50 grabs most of the attention, the Nifty Next 50 is equally worthy of consideration. This index comprises the next 50 companies below the Nifty 50, making it almost as safe and potentially more rewarding. In this blog, we will not only compare it with the Nifty 50 but also show you how to invest in it through platforms like Zerodha.
Why Invest in the Nifty Next 50?
Before investing in any financial security, two factors must be thoroughly examined: risk and reward. Post-COVID, people often overlook this crucial aspect. So, why should you invest in the Nifty 50 index or the Nifty Next 50? The answer is simple: low risk.
Risk and Reward: Comparing Nifty 50 and Nifty Next 50
Let's delve into the risk and reward data for both indices up to 2018. We will also look at the latest data and show you how to invest. Historically, the Nifty Next 50 has consistently provided better long-term returns compared to the Nifty 50. The reason is straightforward: companies in the Nifty Next 50 are striving to enter the Nifty 50, making them more aggressive in their growth strategies.
Understanding the Risk-Reward Ratio
The risk-reward ratio for the Nifty Next 50 is slightly higher, which is logical: high risk, high return. However, when compared to the Nifty 50, this "high risk" is relatively moderate. Understanding the risks involved is crucial before making any investment decisions.
Investment Options for Nifty Next 50
Investing directly in any index is not possible. There are two options: Index Mutual Funds and Exchange Traded Funds (ETFs). The primary purpose of an index fund is to mimic an index. An ETF, listed on an exchange, can be bought and sold like a regular share.
Why Choose ETFs Over Index Funds?
ETFs generally have lower expense ratios compared to index funds. For the Nifty Next 50, the most popular ETF is the Nippon India Nifty Next 50 Fund, also known as Junior Bees. Let's explore the benefits of investing in this ETF.
Benefits of Investing in Junior Bees
- Low expense ratio: Only 0.17%
- Mirrors Nifty Next 50 returns
- Quick buy/sell options
- No exit load
- Passive income
Performance of Junior Bees Compared to Nifty 50
When comparing the returns of the Nifty 50 and the Nifty Next 50, Junior Bees consistently outperform the Nifty 50 over long-term periods. Since its inception in February 2003, Junior Bees have turned ₹10,000 into a substantial amount, showcasing the power of compounding and long-term investing.
Top Holdings in Junior Bees
The top holdings contributing to the stellar performance of Junior Bees include:
- Trent
- Bharat Electronics
- Tata Power
- Hindustan Aeronautics
- Power Finance
- REC
- Indian Oil
- DLF
- IndiGo
- GAIL
How to Invest in Junior Bees via Zerodha
Investing in Junior Bees through Zerodha is straightforward. Simply search for 'Nippon India ETF Junior' and you can buy or sell as needed. Additionally, you can set up a SIP (Systematic Investment Plan) to automate your investments.
Conclusion
The Nifty Next 50, or Junior Bees, offers a compelling investment opportunity. With lower risk and higher returns, it is an excellent alternative to the Nifty 50. Investing through ETFs like Junior Bees not only provides lower expense ratios but also offers flexibility and ease of trading. For those looking to diversify and maximize their returns, Junior Bees is a solid choice.
Disclaimer: Information provided in this blog is completely for the Education & Information Purpose only. we do not recommend any type of buying or selling activity through this blog. Always consult your Financial advisor before investing.
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Frequently Asked Questions
The Nifty Next 50 Index comprises the next 50 companies that rank below the Nifty 50. These companies are considered almost as safe as the Nifty 50 constituents but often offer higher growth potential as they strive to enter the top 50. Investing in the Nifty Next 50 provides a balance of moderate risk and substantial returns, making it an attractive option for investors seeking growth and diversification.
The Nifty Next 50 has a slightly higher risk-reward ratio compared to the Nifty 50. This means that while the potential for returns is higher, the associated risk is also greater. However, this risk is relatively moderate compared to other high-risk investments. Historically, the Nifty Next 50 has provided better long-term returns than the Nifty 50, reflecting the growth potential of the companies within it.
Direct investment in the Nifty Next 50 is not possible. Investors can gain exposure to this index through Index Mutual Funds or Exchange Traded Funds (ETFs). ETFs are generally preferred due to their lower expense ratios and ease of trading. One popular ETF tracking the Nifty Next 50 is the Nippon India Nifty Next 50 Fund, commonly known as Junior Bees.
Investing in Junior Bees ETF offers several benefits:
- Low Expense Ratio: Junior Bees have an expense ratio of only 0.17%, making it cost-effective.
- Performance: The ETF mirrors the returns of the Nifty Next 50, providing a reliable benchmark.
- Liquidity: Junior Bees can be quickly bought and sold on the exchange like regular shares.
- No Exit Load: Investors can exit without additional fees.
- Passive Income: It provides a passive investment option, tracking the index without active management.
Investing in Junior Bees through Zerodha is simple. Follow these steps:
- Search for 'ETF Junior' in the Zerodha platform.
- Buy or Sell: You can purchase or sell shares of the ETF as needed.
- Set Up SIP: For consistent investing, set up a Systematic Investment Plan (SIP) to automate your purchases. This approach offers a convenient way to invest in the Nifty Next 50 and benefit from its potential returns.
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