Think of it this way.
Nifty 50 funds hold the 50 largest companies and this is a pure large-cap index. Nifty Next 50 holds the next 50 biggest companies after Nifty Next 50. Though it is categorized as a large-cap index, it’s not accurate. It’s as good as a mid-cap index and if you compare Nifty Next 50 and Nifty Midcap150, the performance is quite similar.
Now, if you compare these two funds/indices based on returns, Next 50 looks amazing. But that only tells half the story.
The other side is the risk. Like I mentioned, Next 50 is as good as a mid-cap index and it can be quite risky. Check out the drawdowns of Nifty 50 and Nifty Next 50. Next 50 is quite risky.
Now you just invest in Nifty 50 if you don’t want too much risk. If you’re ok with some more risk, you can mix Nifty 50 and Next 50 in whatever proportion that you’re comfortable with.