UTI-Nifty 50 Index Fund – Direct Growth

The UTI-Nifty 50 Index Fund is an index-based diversified equity scheme launched on 6th March 2000 by UTI Mutual Fund.

The scheme distributes the majority of its investments across the financial services, IT, fast-moving consumer goods, automobiles, and oil, gas and consumable fuels sectors. It is managed by Sharwan Kumar Goyal and Ayush Jain.

The scheme’s investment objective is to replicate the performance of the Nifty 50 Index by investing in a portfolio of stocks that comprises the Nifty 50 Index. The scheme uses a passive investment strategy to achieve returns equivalent to those of the Nifty 50 Index by investing in the same stocks and proportions as the Index.

The UTI-Nifty 50 Index Fund does not take any active sector or stock exposure that deviates from the composition of the Nifty 50 Index.

Pros & Cons

Who should invest in the UTI-Nifty 50 Index Fund?

The UTI-Nifty 50 Index Fund is suitable for investors who want to achieve capital growth that aligns with the returns of the Nifty 50 Index. The scheme is also ideal for investors seeking to mitigate risks associated with investing in a single company or sector.

The UTI-Nifty Index Fund is a good choice for new investors or with a limited investment budget, as it provides a low-cost and easy way to gain exposure to 50 of the largest publicly traded companies in India.

The scheme is widely recognised as a reputable investment option within the Index Fund category due to its consistent performance, cost-efficiency, substantial assets under management (AUM), and minimal tracking error. Its ability to generate favourable returns for investors has made it a popular choice among investors. In addition, the fund has a proven track record of delivering a Compound Annual Growth Rate (CAGR) of 11.56% since its inception, which measures the fund’s annualised growth rate over time.

The scheme is suitable for investors with a long-term investment horizon of at least 5 years and very high-risk appetites. However, if your investment objective is low-risk or short-term, other investment options may be more suitable than the UTI-Nifty 50 Index Fund.

What are the benefits of investing in the UTI-Nifty 50 Index Fund?

• The UTI-Nifty 50 Index Fund has generated a CAGR of 11.56% since its inception, almost matching its benchmark, the Nifty 50 Index.
• The scheme is the largest Nifty 50 Index fund, indicating the scheme’s popularity amongst investors.
• The UTI-Nifty 50 Index Fund has a lower expense ratio than actively managed funds, which means more money is invested in the underlying assets rather than being used to pay for fund management fees.
• As the scheme fund aims to track the performance of the Nifty 50 Index, it provides diversification across different sectors and companies, which helps to reduce the risk of investing in a single stock.
• The tracking error of the UTI-Nifty 50 Index Fund is low. Tracking error measures the deviation of the scheme’s returns from the returns of the Nifty 50 Index. A low tracking error indicates that the scheme closely tracks the index’s performance.
• The benchmark of UTI-Nifty 50 Index Fund, i.e., the Nifty 50 Index, demonstrates lower volatility when compared to mid and small-cap indices. The Nifty 50 Index has consistently delivered positive returns based on 5-year daily rolling returns in the past.