Nifty 50 Equal Weight Index

Globally, the market-cap-weighted index is the most common one and is used by major indices around the world. A popular alternative to market cap weighting is an Equal Weight Index. 

What Is Equal Weight?

Equal weight is a type of weighting that gives the same weight to each stock in an index. The smallest companies are given equal weight to the largest companies in an equal-weight index fund or portfolio.

Nifty 50 Equal Weight Index.

The Nifty 50 Equal Weight Index represents an alternative weighting index strategy to its market capitalization weighted parent index, the Nifty 50. The index includes the same companies as its parent, however, weighted equally.

Highlights.

  • All constituents forming part of the Nifty 50 shall form part of the index.
  • Equal weight is assigned to all the companies in the index.
  • Index is rebalanced quarterly.
  • The index follows the composition of the Nifty 50 Index at every point in time.
Performance of Nifty 50 Equal Weight Index vs Nifty 50.

NIFTY 50 Equal Weight


Nifty 50 Equal Weight and Nifty 50 Index performance table.

Nifty 50 Equal Weight Index
source nseindia


The Nifty 50 Equal Weight Index has outperformed the Nifty 50 Index since inception, with 15.3% CAGR return against 13.5% CAGR return for the Nifty 50 Index. However, over the last 5 years, the Nifty 50 Equal Weight Index has underperformed the Nifty 50 Index, returning 11.7% CAGR return against 14.0% CAGR for the Nifty 50 Index. 

The volatility profile of the Nifty 50 Equal Weight Index is broadly similar to the Nifty 50 Index.

The Nifty 50 Equal Weight has certain features like there is no undue concentration on a few stocks or a particular sector. While the momentum style of investing drives the market-cap-weighted indices, the Equal Weight Indices have a fine balance of overpriced and underpriced holdings.

There are quite a few Equal Weight Index funds available like DSP, ABSL Nifty 50 Equal Weight Index Funds and Principal, Sundaram Nifty 100 Equal Weight Index Fund. There is also a Nifty 50 Equal weight index fund new fund offer coming up next week from HDFC.