NE50!

Fund Houses like UTI, HDFC, DSP, ICICI etc. have come out with Nifty50 Equal Weight Index Fund. They replicate the Nifty50 Equal Weight Total Return Index (NE50). Investors are less exposed to sectoral or stock specific concentration risk as all stocks have equal weightage in NE50. All stocks weight is capped at 2 percent at the end of each quarter. When there is a broad-based rally in the markets then NE50 does better than traditional Nifty50 index fund. If a stock with a large weight in Nifty 50 underperforms, the index returns suffer. However, that is not the case with NE50 as all stocks are equally represented. For passive investors this strategy of equal weightage can be interesting, but they should pay heed to expense ratio & tracking error of such funds.