SBI Nifty50 Equal Weight Index Fund
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Business Overview
The SBI Nifty50 Equal Weight Index Fund is designed for investors seeking diversified exposure to the top 50 companies in India, with an equal weightage approach. This fund is ideal for those looking to balance their portfolio while minimizing risk. By investing equally in each company, it reduces the impact of market volatility and enhances potential returns. This fund matters for its simplicity and effectiveness in capturing the growth of India's leading firms, making it a smart choice for both new and seasoned investors.
- Diversified exposure to top 50 Indian companies
- Equal weightage minimizes risk and volatility
- Ideal for long-term growth investors
- Simple investment strategy for all experience levels
- Managed by SBI, a trusted financial institution
Investment Thesis
The SBI Nifty50 Equal Weight Index Fund offers a compelling investment opportunity due to its strong backing from the SBI Group, a trusted name in Indian finance. With the growing adoption of digital services and attractive valuations compared to peers, this fund positions itself as a robust choice for investors seeking diversified equity exposure.
- Strong promoter group with SBI's credibility enhances trust.
- Significant growth potential in digital services sector.
- Attractive valuation compared to other index funds.
- Diversified exposure to top Nifty50 companies.
- Ideal for long-term investors seeking balanced equity growth.
Opportunity vs Risk
- Diversified exposure to Nifty50 stocks
- Potential for steady long-term growth
- Lower expense ratio than active funds
- Suitable for risk-averse investors
- Market volatility affecting returns
- Limited to Nifty50 performance
- Lower liquidity compared to large caps
- Potential tracking error issues
Peer Perspective
SBI Nifty50 Equal Weight Index Fund trades at a slight premium compared to peers like HDFC Nifty50 Index Fund and ICICI Nifty50 Index Fund. A rerating could occur with sustained growth acceleration and improved margin stability.
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10BusinessHighThe fund is invested in a diversified portfolio of Nifty50 companies, which are generally in future-ready sectors.
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10GrowthHighThe underlying companies have shown consistent revenue and profit growth.
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10ProfitabilityHighROE and ROCE are healthy, but OCF is slightly lower than net profit.
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10ValuationHighValuation metrics like P/E and P/B are in line with peers.
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8BalanceHighThe fund maintains a reasonable debt/equity ratio and good liquidity.
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7GovernanceHighPromoter holding is strong with minimal pledging.
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6DriversGoodGrowth drivers are present, but execution risks exist due to market volatility.
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5TechnicalsGoodMarket sentiment is neutral with moderate liquidity.