Nifty 50 Equal Weight Index funds: How are they different from Nifty 50 and should you invest in them?
Investors India|January 2024
In a game of chess, every piece, from pawn to queen, has unique abilities and can move in a specific way.
Abhishek Singhal
Nifty 50 Equal Weight Index funds: How are they different from Nifty 50 and should you invest in them?

However, a chess player has to frame an overall broad strategy, fit each piece within that, and, as a team, make the best of the unique abilities of each piece. Similarly, in investing, you have to frame an overall investment strategy, let each component contribute with its unique capabilities, and earn meaningful risk-adjusted returns at the portfolio level. The Nifty 50 Equal Weight Index funds can be best suited for such an investment strategy. In this article, we will understand the Nifty 50 equal weight index, the index funds based on it, how they differ from Nifty 50 market capitalisation index funds, performance comparison, and whether one should invest in it.

What is the Nifty 50 Equal Weight Index, and how is it different from the Nifty 50 Index? 

The Nifty 50 Equal Weight Index is an alternative weighing index derived from the parent Nifty 50 Index. It has all the 50 constituents of its parent. However, the major difference is with regard to the weightage of each company and the sectoral concentration. The Nifty 50 Equal Weight Index assigns an equal weightage of 2% to each of the 50 companies, whereas the weights of Nifty 50 Index companies are based on their market capitalisation.

Note: The weightage of Nifty 50 Index constituents and Nifty 50 Equal Weight Index constituents is as of 30th November 2023

This story is from the {{IssueName}} edition of {{MagazineName}}.

Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.

This story is from the {{IssueName}} edition of {{MagazineName}}.

Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.

MORE STORIES FROM INVESTORS INDIAView all
ASK THE EXPERT
Investors India

ASK THE EXPERT

Ques. One of my friends told me that your company provides detailed Retirement plans. I want to know what is the procedure to get my Retirement plan. I will be retiring in March 2025. R.P Gupta, Noida

time-read
3 mins  |
November 2024
How to Naturally Reverse Fatty Liver Disease
Investors India

How to Naturally Reverse Fatty Liver Disease

The liver, located on the upper-right side of the abdomen, is the body’s largest internal organ and plays a critical role in detoxifying the blood and processing nutrients.

time-read
2 mins  |
November 2024
Banking sector which has underperformed in the last two years, now offers a favorable risk-reward profile
Investors India

Banking sector which has underperformed in the last two years, now offers a favorable risk-reward profile

Do you think the market is overpriced? Is yes, should investors refrain from investing in index schemes at the current valuation?

time-read
5 mins  |
November 2024
India will continue to enjoy benefits of a close US relationship and trade will continue to grow
Investors India

India will continue to enjoy benefits of a close US relationship and trade will continue to grow

Q1. The US elections are said to be one of the closest till date, what impact will the election of a Republican / Democratic party have on the US economy and how is that going to affect India in the short as well as the long term?

time-read
3 mins  |
November 2024
Understanding Momentum Funds
Investors India

Understanding Momentum Funds

Momentum funds are a type of investment fund that focuses on companies experiencing positive momentum in factors such as earnings, revenue, and stock price movement.

time-read
1 min  |
November 2024
Risks and opportunities associated with Small Caps
Investors India

Risks and opportunities associated with Small Caps

Small-caps are a stock-picker’s paradise.

time-read
2 mins  |
November 2024
How to navigate your portfolio through bull market a
Investors India

How to navigate your portfolio through bull market a

Indian equities have been in a bull run for the past four years.

time-read
4 mins  |
November 2024
Choosing mutual fund schemes depending on your age to achieve life goals
Investors India

Choosing mutual fund schemes depending on your age to achieve life goals

The choice of mutual fund (MF) scheme might be influenced by one’s risk profile or age.

time-read
3 mins  |
November 2024
Thematic Fund Or Sectoral Fund, Which Fund Suits You?
Investors India

Thematic Fund Or Sectoral Fund, Which Fund Suits You?

A thematic fund is a type of mutual fund that focuses on investing in companies based on specific themes or trends.

time-read
2 mins  |
October 2024
Be Kind To Your Kidneys
Investors India

Be Kind To Your Kidneys

The kidney is a vital organ in our body which is four inches long and two and a half inches in width.

time-read
5 mins  |
October 2024