Buying Index fund NIFTY 50 For long term

hii i am varun

My question is that i wanna buy nifty 50 index for long term ( Very long term ) basically dont wanna sell it. And i wanna invest huge sum. Through which AMC it is best to buy it. So that i dont have to worry about anything and how to buy ? Are ETFs are the only way to buy Nifty or there are more ways that i dont know YET ?

Apart from ETF, you can buy as a mutual fund such as from Zerodha… Invest in the Zerodha Nifty 50 Index Fund

Mutual fund can be bought in two forms, though. Demat and SoA. For demat mode, you may buy from Zerodha Coin. For SoA mode, use the fund house’s website or app.

Choose AMC based on Base Expense Ratio and Tracking Error. Aforementioned Zerodha fund has relatively small AUM (at 71Crore) compared to some big names, though.

When considering NIFTY 50 Index, there is also NIFTY 50 Equal Weight Index fund such as from Axis Invest in Axis Nifty50 Equal Weight Index Fund NFO | Invest in Nifty50 Equal Weight Index Fund Online .

Good luck choosing whatever works best for you.

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thank you so much

My view is stagger your buy over a period instead of putting all the money on one day.

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yeah thank yoy

Would you be open to exploring another index for a very long-term horizon? The Nifty LargeMidcap 250 could be a stronger alternative to a plain vanilla Nifty 50 fund.

It combines the top 100 large-caps with 150 mid-caps in a 50:50 split. Because it mechanically rebalances every quarter, it naturally executes an automated “buy low, sell high” approach. Historically, this has boosted its risk-adjusted returns (Sharpe ratio), especially over longer holding periods.

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could you share any literature for this point?

are the average absolute rolling returns too better for largemidcap?

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from Page 5 of https://www.niftyindices.com/docs/default-source/indices/nifty-largemidcap-250/nifty-largemidcap250-whitepaper_2023.pdf

from page 6

“The Nifty LargeMidcap 250 Index has outperformed the Nifty 100 index across the long term horizon period of 3, 5, 7, 10 and 15 year. Over the last 5 years, between September 30, 2018 to September 29, 2023, Nifty LargeMidcap 250 index has delivered 17.1% CAGR as against 13.2% CAGR delivered by Nifty 100 Index.”

and

“The Nifty LargeMidcap 250 Index has a higher return-risk ratio than the Nifty 100 Index over the long and shortterm horizons”


Although Nifty100 is similar to nifty 50 in terms of behavior ..still is not exactly same. So I ran query “compaire long term risk adjusted returns of Nifty50 and Nifty LargeMidcap 250” to gemin AI

Gemini AI Response pasted as it is.. however you can do your own analysis.

While the Nifty LargeMidcap 250 delivers higher absolute annualized returns than the Nifty 50, evaluating them on a risk-adjusted basis reveals how much extra volatility, drawdown severity, and downside pain an investor must accept to capture that outperformance.

Long-Term Risk & Risk-Adjusted Metrics (TRI Basis)

The following metrics reflect historical long-term data (analyzed across 10- to 15-year rolling windows and full market cycles):

Metric Nifty 50 TRI Nifty LargeMidcap 250 TRI Interpretation
Annualized Volatility ($\sigma$) ~15.0% – 16.5% ~17.5% – 19.5% LargeMidcap 250 is ~2.0%–3.0% more volatile p.a.
Sharpe Ratio (Excess return / Total risk) ~0.38 – 0.44 ~0.42 – 0.49 Slightly favors LargeMidcap 250 due to 1.5%–2.5% CAGR alpha.
Sortino Ratio (Excess return / Downside risk) ~0.55 – 0.62 ~0.60 – 0.70 LargeMidcap 250 rewards downside risk marginally better over 7+ years.
Maximum Drawdown (Peak to Trough) -38% to -55% -45% to -62% LargeMidcap 250 experiences 6%–10% deeper crashes.
Beta (relative to Nifty 50) 1.00 ~1.08 – 1.14 Amplified movements in both directions.
Capture Ratios (Up / Down) 100% / 100% ~112% Up / ~108% Down Captures more upside than downside over full market cycles.

Breakdown of Risk Factors

  • Downside Volatility & The Midcap Drag:

    During major liquidity crunches or recessionary bear markets (e.g., 2008 Global Financial Crisis, 2018–2019 midcap shakeout, March 2020 crash), midcaps face acute liquidity freezes. The 50% midcap exposure drags the LargeMidcap 250 into deeper troughs than the Nifty 50, causing shorter-horizon (1–3 year) risk-adjusted metrics to deteriorate sharply during corrections.

  • The Quarterly Rebalancing Buffer:

    Pure midcap indices (like the Nifty Midcap 150) suffer from elevated drawdown risk and lower long-term Sharpe ratios. However, because the LargeMidcap 250 mechanically rebalances back to a 50:50 ratio every quarter, it systematically harvests midcap gains into large caps at market peaks and re-enters midcaps during troughs. This structural rule improves its Sharpe and Sortino ratios relative to both pure midcaps and pure large caps over a complete 7+ year horizon.

  • Recovery Horizon & Drawdown Duration:

    While the Nifty 50 tends to reclaim prior all-time highs faster (led by institutional foreign inflows into blue chips), the LargeMidcap 250 exhibits a steeper trajectory during the subsequent expansion phase, making its recovery robust once broad market breadth broadens.

Strategic Takeaways

  • Choose Nifty 50 if:

    • Your horizon is under 7 years or you are in/near the capital distribution phase.
    • Deep drawdowns trigger behavioral panic or unplanned redemptions.
    • You prioritize liquidity, the tightest tracking error, and lower impact cost.
  • Choose Nifty LargeMidcap 250 if:

    • You have a 7- to 10-year+ investment horizon.
    • You can tolerate 5%–10% steeper peak-to-trough drawdowns in exchange for an extra 150–250 basis points of annual compounding.
    • You want a self-balancing core equity foundation without needing to manually rebalance between large-cap and mid-cap funds.
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