UTI Nifty Next 50 Index Fund: August 2026 AUM, TER, Tracking Error, Risk and Tax

Summary: UTI Nifty Next 50 Index Fund is an open-ended index mutual-fund scheme seeking to replicate or track the Nifty Next 50 Index rather than select stocks through a discretionary active strategy. The AMC identifies the Nifty Next 50 Total Return Index (TRI) as benchmark and 28 June 2018 as the scheme launch date. UTI’s official scheme page displays month-end assets under management of ₹7,546.56 crore and monthly average AUM of ₹7,516.97 crore as at 31 August 2026, with stated daily total expense ratios of 0.42% for Direct Plan and 0.87% for Regular Plan, minimum investment of ₹1,000 and nil exit load. The scheme is marked Very High on the AMC’s risk metric. The one-year daily rolling tracking error displayed as at 9 September 2026 was 0.04% for Direct and 0.05% for Regular, while the AMC’s August table reports Regular Plan tracking differences of minus 0.84%, minus 0.93% and minus 0.91% for one, three and five years. Tracking difference is not a forecast; index returns, costs, cash drag and rebalancing can cause deviations. For tax year 2026-27, an equity-oriented mutual-fund redemption satisfying the applicable STT and other statutory conditions generally follows the 20% short-term and 12.5% long-term special-rate capital-gains framework, with the ₹1.25 lakh aggregate long-term threshold, applicable surcharge and cess. Tax treatment of losses, IDCW distributions, switches and NRI withholding must be analysed separately. This article presents dated primary-source facts, accounting and compliance implications, and the scheme’s risks without ranking or recommending it.

Scheme Category, Investment Objective and Benchmark

UTI Nifty Next 50 Index Fund is an open-ended passive index fund. The investment objective is to seek returns that, before expenses, closely correspond to the total returns of the securities represented by the underlying Nifty Next 50 Index, subject to tracking error. An index fund cannot promise exact index returns, because expenses, securities transactions, cash holdings, corporate actions and timing differences affect realised NAV. The benchmark is Nifty Next 50 TRI, which incorporates reinvested dividends and is more suitable than a price-only index for return comparison.

The Nifty Next 50 is distinct from the Nifty 50: it contains 50 companies in the broader Nifty 100 universe outside the Nifty 50, under the index provider’s eligibility and maintenance rules. Constituents and weights change with scheduled rebalancing and corporate actions. The index should not be treated as a fixed portfolio of 50 permanent names, nor should the phrase “Next 50” be read as a prediction that every constituent will enter the Nifty 50 or outperform it.

How the Passive Investment Strategy Works

An index fund normally holds index constituents in proportions intended to approximate the benchmark and rebalances when the index provider changes constituents or weights. Its primary mandate is to follow an index, not to forecast currency rates, identify undervalued companies or actively rotate sectors for outperformance. Corporate actions, dividends, new subscriptions, redemptions and trading frictions can cause temporary divergence from the index. The fund manager must manage those practical effects while observing SEBI investment, liquidity and valuation rules.

A fund investing in the Nifty Next 50 has a different concentration and volatility profile from a broad Nifty 500 index or a Nifty 50 index. Sector and company weights are driven by the underlying index methodology, not by the preferences of an investor who chooses the fund. Portfolio weights disclosed at a month-end can change; the latest AMC portfolio file should be checked before publication of any named-holding percentages. The AMC lists Sharwan Kumar Goyal as fund manager on its scheme page.

AUM, TER and the Difference Between Direct and Regular

The AMC’s 31 August 2026 disclosure gives scheme month-end AUM of ₹7,546.56 crore and monthly average AUM of ₹7,516.97 crore. These figures describe assets managed, not revenue, profit, liquidity protection or a guaranteed capacity to meet every redemption under stressed market conditions. AUM also moves with investor flows and market prices. The scheme’s expense ratio is charged within NAV, so investors do not usually receive a separate invoice for the annual TER.

The August 2026 daily TER disclosure was 0.42% for Direct and 0.87% for Regular. The difference of 0.45 percentage point per annum is a snapshot, not a fixed permanent spread: SEBI rules and AMC disclosures permit TER changes within the regulatory framework. Both plans track the same underlying scheme portfolio, but their NAV histories differ because of expenses. A higher historical Direct Plan NAV is not itself evidence of a different investment portfolio.

Tracking Error Versus Tracking Difference

Tracking difference is the return of the scheme minus the return of the benchmark over the same period. A negative difference generally reflects costs and implementation drag, although short-term positive deviations are possible. Tracking error measures the variability of those deviations over time; a low tracking error does not mean a small market drawdown. Investors should not mistake a 0.04% tracking error for a 0.04% annual investment risk or for a promise of future performance.

The table intentionally distinguishes the AMC’s dated historical tracking measures from an independently calculated trailing-return table. The AMC’s product card also displayed Direct Plan since-inception scheme return of 13.12% versus benchmark return of 13.73% as at 31 August 2026; these are historical annualised figures from the AMC display, not forecasts or current-date returns. The performance period, plan, benchmark and return convention must be kept together whenever performance is quoted. Past performance does not assure future results.

Portfolio and Riskometer

The AMC describes the scheme as tracking the 50 securities of the Nifty Next 50 index. A passive strategy can still be highly volatile and concentrated in sectors that dominate the index. The UTI scheme card identifies the Riskometer as Very High. That classification means investors face material market risk, including sharp interim losses. Index membership, market capitalisation and liquidity do not create principal protection; equity values can decline and the fund’s NAV will reflect that decline.

The AMC’s August 2026 site section identifies relative index overweights and underweights, but a passive index fund’s material holding list is not fixed. A responsible publication should not present an old stock-weight table as current. For auditability, this article relies on the AMC’s disclosed scheme objective, index, AUM, expenses, risk metric and tracking data and directs the reader to the latest dated AMC monthly portfolio for individual security weights. The index itself may be rebalanced, with turnover and transaction costs affecting tracking.

Minimum Investment, SIP, Redemption and Exit Load

UTI’s official scheme page states a minimum investment of ₹1,000 and lists SIP, STP and SWP facilities. The current minimum for a specific SIP frequency or transaction channel should be confirmed in the applicable KIM/SID and live transaction form; minimum additional purchases and instalments can have different rules. An SIP is a method of making periodic investments, not a guaranteed return, tax exemption or loss-control arrangement.

The official scheme page lists nil exit load. Nil exit load does not mean that redemption is tax-free, cost-free or free of NAV volatility. Redemption proceeds depend on the applicable NAV and prescribed cut-off/funds-realisation rules. A switch between schemes is generally a redemption and fresh investment for tax purposes even if the investor does not receive money into a bank account. A switch between Direct and Regular plans may also have capital-gains consequences despite the common underlying portfolio.

Tax Year 2026-27: Equity-oriented Mutual Fund Capital Gains

For an investor holding units as capital assets, an equity-oriented mutual fund satisfying the statutory conditions ordinarily falls under the special equity capital-gains provisions of the Income-tax Act, 2025. A redemption after a holding period of not more than 12 months generally produces short-term capital gains taxed at 20% where the relevant STT conditions are satisfied. Qualifying long-term gains after more than 12 months are generally taxed at 12.5% to the extent aggregate qualifying gains exceed ₹1.25 lakh in the tax year, plus applicable surcharge and cess. TaxGuru’s 2026 capital gains guide provides a broader comparison.

The ₹1.25 lakh threshold is an aggregate annual threshold for relevant qualifying long-term equity-type gains, not a separate allowance for each folio, AMC or SIP instalment. A SIP creates separate acquisition dates and costs for units allotted on each instalment. Applicable cost identification, grandfathering for historical holdings, STT and special rules for non-residents must be checked against the actual redemption. Capital-gains rates do not guarantee that a sale will be profitable; losses are common and must be handled under separate set-off rules.

Illustrative equity-fund gain calculation

This example assumes a resident individual, one qualifying long-term redemption, no other eligible gains using the annual threshold and no special cost adjustments. It is a calculation illustration, not a statement about actual UTI scheme performance. Cess at 4% on ₹9,375 would be ₹375 if no surcharge or other adjustment applies, giving ₹9,750 in that simplified case. Actual liability depends on the complete tax return.

Capital Losses, IDCW, TDS and NRI Treatment

A short-term capital loss may generally be set off against short-term or long-term capital gains, while a long-term capital loss is generally restricted to long-term capital gains. Carry-forward requires satisfaction of return-filing conditions and the statutory period. Redemption of units and distribution of income under an IDCW option are different tax events. IDCW income is ordinarily taxable in the investor’s hands under the applicable provisions; it is not a tax-free return of capital merely because the scheme has a distribution option.

Section 393(1), Table Sl. No. 4(i) of the Income-tax Act, 2025 contains a resident withholding provision for specified income in respect of mutual-fund units at 10% with a ₹10,000 threshold, subject to the precise scope and exceptions. It should not be confused with capital-gains tax on redemption. NRI investors require separate review of withholding, residential status, treaty documentation, FEMA account route and repatriation conditions; the resident TDS mechanics are not a substitute for non-resident analysis.

SEBI Framework, Disclosures and Accounting

The Securities and Exchange Board of India (Mutual Funds) Regulations, 2026, last amended on 7 July 2026 in the official SEBI listing, and the SEBI Master Circular dated 20 March 2026 govern material aspects of scheme operation and disclosures. The AMC’s SID, KIM, SAI, monthly factsheet and portfolio disclosure must be read together. The scheme’s published riskometer, expense ratio, portfolio and NAV can change and should be dated. Regulatory oversight does not constitute a guarantee of capital or investment return.

For an individual investor, the units are generally tracked at acquisition cost and redemption proceeds for capital-gains reporting; a personal investment account does not become an Ind AS financial statement solely because mutual-fund units are held. For entities reporting under Ind AS, units can be financial assets requiring classification and measurement under Ind AS 109, based on the applicable business model and contractual cash-flow characteristics; fair-value changes and disclosures require entity-specific assessment. Non-Ind AS entities must apply their relevant accounting standards and investment classification.

Compliance Records and Dated-Disclosure Controls

• Preserve folio, PAN/KYC, bank mandate, plan and option details.
• Maintain allotment dates, SIP instalment costs and redemption statements for lot-wise holding periods.
• Retain the 31 August 2026 AMC AUM, TER and tracking disclosure used in this article.
• Compare returns only with the same dated TRI benchmark and plan.
• Check current SID/KIM, riskometer, monthly portfolio and any addendum before publishing later updates.
• Reconcile capital gains, losses, IDCW and applicable TDS with AIS/Form 26AS and ITR schedules.
• For NRI holdings, retain tax-residency and treaty documents and verify FEMA repatriation route.

Frequently Asked Questions

1. What does UTI Nifty Next 50 Index Fund track?

It seeks to replicate or track the Nifty Next 50 Index; the official benchmark is Nifty Next 50 TRI.

2. What was the AUM at 31 August 2026?

The AMC disclosed month-end AUM of ₹7,546.56 crore and monthly average AUM of ₹7,516.97 crore.

3. What TER did the AMC disclose for August 2026?

Daily TER was stated as 0.42% for Direct and 0.87% for Regular, as at 31 August 2026. TER can change.

4. What was the scheme riskometer?

The AMC displayed Very High. This is a risk classification, not a prediction of future returns.

5. Is there an exit load?

The official scheme page listed nil exit load; tax and NAV movement remain separate.

6. What is the minimum investment?

The official scheme page displayed ₹1,000. Transaction-specific SIP/additional-investment minimums should be checked in the current KIM/SID.

7. Are redemptions after one year tax-free?

No. Qualifying equity-oriented-fund long-term gains are generally taxed at 12.5% above the aggregate ₹1.25 lakh threshold, subject to statutory conditions.

8. Can NRI investors use resident tax/TDS rules unchanged?

No. Non-resident withholding, treaty, residential-status and FEMA/repatriation questions require separate analysis.

Key Takeaways

• UTI Nifty Next 50 Index Fund is a passive index scheme benchmarked to Nifty Next 50 TRI.
• Official 31 August 2026 AUM was ₹7,546.56 crore; daily TER was 0.42% Direct and 0.87% Regular.
• Riskometer was Very High; passive does not mean capital protection.
• Historical tracking difference and tracking error are distinct measures, not return forecasts.
• The AMC listed minimum investment of ₹1,000 and nil exit load.
• Equity-fund gains, capital losses, IDCW and NRI withholding have separate tax rules.
• Always retain dated AMC documents when quoting scheme statistics.

*****

Disclaimer: This article is general educational information based on UTI Mutual Fund’s dated official scheme disclosures, SEBI regulations and Income-tax Act, 2025 material reviewed on 12 October 2026. It is not a recommendation, rating, ranking, solicitation or personalised investment, financial, legal, accounting or tax advice and does not recommend buying, selling, switching, redeeming or starting an SIP in the scheme. Equity mutual funds involve market, concentration, tracking, liquidity and operational risks, and past returns or tracking statistics do not guarantee future performance. AUM, NAV, holdings, TER, riskometer, regulatory provisions, tax rates and scheme terms may change after the dates quoted. Readers must consult the current SID, KIM, SAI, factsheet, SEBI/AMFI disclosures and tax provisions for their own facts. TaxGuru, its owners, editors, management, authors, employees and affiliates accept no responsibility or liability for any loss, damage, tax, penalty, decision or consequence arising from reliance on this article.

Primary Sources and Verification Dates

• UTI Mutual Fund, official UTI Nifty Next 50 Index Fund scheme page: AUM, AAUM, TER, benchmark, minimum and exit load as at 31 August 2026; tracking error as at 9 September 2026.
• UTI Mutual Fund, official “Rule-Based Investing” scheme card: Very High risk metric and since-inception Direct/benchmark returns displayed as at 31 August 2026.
• SEBI, Securities and Exchange Board of India (Mutual Funds) Regulations, 2026, listing last amended 7 July 2026; SEBI Master Circular for Mutual Funds dated 20 March 2026.
• Income-tax Act, 2025, capital-gains provisions and section 393(1) Table Sl. No. 4(i); AMFI published tax guide for equity-oriented mutual funds.