Avinash.tech(…)

Now that you have fully exhausted your ₹20K on PPF and Nifty 50 , let explore whats next in line for increasing our Investing portfolio. If you dont know what I am talking about do read 20K rule.

You are now constantly investing ₹12500/- in PPF and another ₹7500/- in Index Fund ( Nifty 50 ). Growing confidence and discipline in your new found zeal for investing , you wonder if there are more avenues ! Ofcourse there are.

Imagine that you have ₹42500 in corpus to invest instead of the ₹20,000 that you initially started with! After investing ₹12,500 in PPF , you are left with ₹ 30,000. With Nifty50 we would be investing in top 50 companies in India. Is there a way to increase this bucket to top 100 companies in India ? Yes !!

Nifty Next 50 – This is an Index Fund that has its focus on the next 50 top companies in India.

Why is Nifty Next 50 important ?

Simply put, Nifty next 50 lists the next 50 best ( rank #51 to #100 ) companies in India which are in line to get into Nifty 50. Remember the debacle that happened with YES bank ? Shares fell from around ₹400/- to ₹5/-. Investing in YES bank and holding it for huge gains would have been a disaster! There were several books by Indian Authors going all gaga about yes Bank and how fast it has grown :p. Thats were Index Funds make sure that shitty companies like Yes bank are thrown out of Nifty 50 and companies that are waiting their turn in Nifty Next 50.

Also do remember , when a company gets its place in Nifty 50 , its share price soars and when it gets out of Nifty the price tanks. And it does make headlines as seen in this news snippet from Mint.

Hope this article has helped you in scaling up on the investment. If you have a girl child, please make sure you invest in Sukanya Samriddi Yojana which can yield a compounded return of 8% without attracting capital gain tax! Read more about more here. Happy Investing !