The Nifty 50—India's headline stock market index—is down about 5% over the past 12 months and about 2% over the last six months. Yet a set of equal-weight index funds and exchange-traded funds (ETFs) have done better in the recent period.
For instance, an equal-weight fund tracking the Nifty 500 Equal Weight index returned about 15% over six months (as of 9 September 2026), funds tracking the Nifty 100 Equal Weight index returned around 7%, and the Nifty 50 Equal Weight-based funds are up about 2.7% over the same period.
Equal footing
Equal weight simply assigns the same weight to every stock in an index, instead of weighting by market capitalization. In a Nifty 50 Equal Weight index, for instance, each of the 50 stocks carries an equal 2% weight, reset back to equal every quarter—so no single stock or sector can dominate the way it can in the market-cap-weighted Nifty 50.
Equal weighting can also change the characteristics of an index. For example, the Nifty 500 Equal Weight index has 50% exposure to small-cap, 30% to mid-cap and 20% to large-caps as a result of the equal-weighting, while the parent Nifty 500 index carries close to 70% exposure to large-caps, with just 10% in small-caps and 20% in mid-caps.
These strategies have also grown gradually. Investor assets in equal-weight index funds and ETFs have seen a significant jump—from about ₹140 crore at the end of 2020 to over ₹10,500 crore by December 2025. Several of these funds are new, but they track indices that have long historical data. Below is a look at how these strategies have performed over the long run—and whether you should invest.
Past performance
Over rolling seven-year periods, these equal-weight indices have delivered average annualized returns of roughly 12-14%, and none posted a negative return over any seven-year window. The analysis is based on seven-year returns rolled daily between 11 September 2006 and 10 September 2026. This period included 3,218 observations of seven-year returns of each of the indices.
The analysis is based on total return index variants, which captures both price movements and dividend gains in the index.
That outperformance over the parent index, though, tends to move in cycles, said M. Pattabiraman, founder of Freefincal.
For instance, as the market surged in 2014 after that year's general election, the broader equal-weight indices raced well ahead of their parents—the Nifty 500 Equal Weight returned about 60% in calendar year 2014 against the Nifty 500's 39%, and the Nifty 100 Equal Weight about 42% versus the Nifty 100's 35%.
The recovery after the 2008 crash showed an even sharper divergence: from the March 2009 market bottom to late 2010, the Nifty 500 Equal Weight surged about 279% against the Nifty 500's 169%, and the Nifty 50 Equal Weight about 189% versus the Nifty 50's 150%.
Over longer periods, though, the differential versus the parent index can be wide or narrow, depending on which equal-weight index it is and the phase of the market. On rolling seven-year periods, the Nifty 100 Equal Weight and Nifty 500 Equal Weight have beaten their parents by about half a percentage point a year on average.
The gap is larger for the narrower baskets—the Nifty Top 10, Top 15 and Top 20 Equal Weight. The Nifty Top 10 Equal Weight, for instance, beat the Nifty 50 benchmark by about 2 percentage points a year, in annualized terms, over rolling seven-year windows.
What to watch out for
Different equal-weight indices solve different problems.
"A Nifty 50-based equal-weight strategy gives you basic exposure to the market while solving for the concentration that comes with a regular, market-cap-weighted Nifty 50, where some stocks or sectors typically carry higher weights," said Anil Ghelani, head of passive investments and products at DSP Mutual Fund.
"In the narrower indices—the Top 10, 15 or 20—you get a concentrated portfolio, but equal weight ensures no single stock or sector dominates. It is more like a focused portfolio of the largest Indian companies."
The universe matters most, said Siddharth Srivastava, head of ETF products and fund manager at Mirae Asset Mutual Fund.
"Depending on the index it is based on, an equal weight index can have very different exposure not just to stocks, but also to market cap segments and sectors. A Nifty 500 equal-weight index will have 50% exposure to the small-cap segment and 30% to mid-cap, while a BSE 200 equal-weight index will have 50% exposure to mid-cap and the rest to large caps. Similarly, the Nifty 50 equal-weight index has much lower representation in the BFSI segment compared to the Nifty 50," he said.
"Investors should first decide which segment or segments they want equal-weight exposure in, and whether they are okay with not just equal stock weights but also changes in sectoral and segment representation and if it aligns with their investment objective and risk profile. A calendar year wise performance and risk comparison over last 10-15 years between the equal-weight index and its market cap based peer can throw some interesting insights and make the selection easier," he added.
Risk check
Investors should also weigh concentration risk, said Pattabiraman. "Some of these portfolios—the narrower indices—can become concentrated. The question worth asking is whether a fund can manage so many stocks well once the asset size of the broader fund grows large. Investors should not just look at historical index performance, but at how these funds do in the live market," he said—the impact costs, whether the fund manages tracking error well, and, for ETFs, whether it trades close to its indicative net asset value (iNAV).
Most of the equal-weight funds can work as a satellite allocation—a smaller, diversifying slice held alongside a core portfolio—once your regular mutual fund investments are in place.
“Except for Nifty 50 equal-weight—which is a pure large-cap focused strategy—several of these equal-weight indices are catering to certain specific segments of the market. Hence, these should be considered part of the satellite allocation,” said Surya Bhatia, a financial adviser at Asset Managers.