DSP NIFTY 50 EQUAL WEIGHT ETF
DSP NIFTY 50 EQUAL WEIGHT ETF
Why you should invest in equal-weight funds?
"Investors looking for balanced diversification & anti-momentum ways to play equity index funds can consider buying units of equal weight index funds tracking Nifty 50 for their core portfolio. You get the same set of top-quality stocks that the bluechip baskets have, but with an important twist - equal weight for all." – The Hindu BusinessLineA unique 'zero-bias' strategy Invests equally in each stock without any bias, no fund manager 'thinking' or emotions involved
Top 50 Indian Companies This ETF will replicate the Nifty 50 Equal Weight TRI, a derivative of the Nifty 50 Index
Magic Formula for Wealth Creation - An Equal-Weighted Index
"In a tense cricket match, while defending a low total, a calm captain will show faith in the bowler, motivate the fielders & expect equal effort from all players. It is not about just the 'heavyweight' stars, but all players need to perform equally and work hard to try to win the match. In investing, an index fund using a similar 'equal effort (weight) strategy' can deliver similar outcomes." - Economic Times.
Equal Weighted Strategy: Instead of a market cap-based weightage (like the Nifty 50 index), all 50 stocks from the Nifty 50 Index will be approximately equally weighted at 2% each
- Nifty 50 Equal Weight TRI is likely to underperform Nifty 50 when the larger weighted stocks in the portfolio outperform the smaller weighted stocks in up or down markets, i.e. in highly polarized markets
- DSP Nifty 50 Equal Weight ETF replicates the Nifty 50 Equal Weight Index.
- By matching the Nifty 50 Equal Weight Index, it allows you to invest in India's top 50 companies.
- Instead of a market cap-based weightage (like in the Nifty 50), all 50 stocks are approximately equally weighted at 2% each.
Peak Polarisation in Large Caps - Start of Mean Reversion?
"Nifty 50 index consists of 'good' companies that are leaders in their sectors, large in size and have better chances of riding through business cycles. Stock weights in Nifty 50 are heavily tilted to businesses with higher market capitalization- which effectively means betting more on larger companies. But who led the rally post polarization in Index heavyweights? Will history repeat? In times of crises, can the same 50 stocks help fetch better returns with a slight twist in weights?" - Internal
- Since this is an ETF, units are listed on stock exchanges like BSE or NSE and can be bought & sold through a registered broker. The NAV varies real-time, as per market movements.
The NIFTY50 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.
Example – HDFC Bank constitutes 9.1% of the Nifty 50 Index due to its size represented through its large free-float market cap.
While the same stock has 2.0% weight in Nifty 50 Equal Weight Index, thereby eliminating bias caused by size of the company.
Thank you for contacting Rounaq! Please let us know how we can help you.
Comments
Post a Comment