UTI Nifty 50 Equal Weight Index Fund Re-Launches From 9th June. Is it a Good Investment?

If you want to invest in an index fund, you can consider UTI Nifty 50 Equal Weight Index Fund which will be launched for continuous subscriptions from 9th June. Know the fund details and whether it is a good investment avenue.

• UTI UTI Nifty 50 Equal Weight Index Fund launched its NFO which closed on 5th June.
• From 9th June, the fund will be available for regular investments.
• It is an index fund that tracks the Nifty 50 Equal Weight Total Return Index.
• The fund has both pros and cons and you should assess them and your investment strategy before investing.

UTI Mutual Fund launched a new fund under the New Fund Offer (NFO) called the Nifty 50 Equal Weight Index Fund. It is an index fund that will track the performance of its underlying index which is the Nifty50 Equal Weight Total Return Index. The fund’s returns will aim to mirror the returns of the index after adjusting for the underlying expenses and a margin for tracking error.

Other features of the Nifty 50 Equal Weight Index Fund are as follows –

• It is an open-ended equity mutual fund that will be passively managed.
• The expense ratio is extremely low.
• The fund manager is Sharwan Kumar Goyal.
• 2% of the portfolio will be allocated to each stock in the Nifty 50 index and the portfolio will be rebalanced quarterly. 

Also, read - Have you been investing in Nifty Next 50 Index Funds correctly? Find out now!

Pros and cons of the Nifty 50 Equal Weight Index Fund

Here’s a look at the good and bad aspects of the scheme –

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Should you invest?

The UTI Nifty 50 Equal Weight Index Fund is not the only index fund that invests in Nifty 50 stocks in equal weights. There are other funds too which have yielded better returns than large-cap equity funds. For instance, the DSP Nifty Equal Weight Nifty 50 Index Fund yielded a return of 28.65% in the last three years compared to 23.36% yielded by large-cap funds.

So, if you are looking for passive investing in some of the top large-cap stocks, UTI Nifty 50 Equal Weight Index Fund can be a good choice. However, consider the risk profile of the scheme and its tax aspects before investing to make an informed decision. 

Also, read - Find out which is better - ETFs or Index Funds