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Equal-weight funds: The Hidden Bets Investors Are Making
BusinessLine 1d ago·29 Aug 2026, 4:10 pm
Equal-weight funds are a popular investment strategy where every stock in a portfolio gets the same amount of money invested, regardless of its size. Instead of buying the biggest companies like Apple or Microsoft, these funds invest an equal amount in every company in an index. This approach means investors are betting on smaller, mid-sized companies to perform well, rather than relying on a few massive giants to drive returns.
For investors, this strategy offers a way to diversify beyond the usual market leaders. It can be less risky if the smaller companies grow, but it also means the portfolio might be more volatile. If the biggest companies fall, the fund might still do well if the smaller ones rise. Investors should watch how these funds perform during market downturns and compare their returns to standard index funds to see if the strategy fits their risk tolerance.
Excerpt from BusinessLine
India’s most-watched benchmarks have a built-in tilt: a handful of mega-caps can dominate the index. In the Nifty 50, the top 10 constituents accounted for 53 per cent of the index, as of July 2026. When these stocks lead, the market-cap-weighted index soars; when they falter, the benchmark feels the drag.…Read the original at BusinessLine
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