Introduction
Invest In Nifty: When you move to a new place, you have no idea how things work. It makes sense to take local help to navigate the streets of the new location and understand life. Just like that, if you’re unfamiliar with capital markets, you don’t have to feel helpless. You can count on mutual funds to be your guide. One of the latest in the market is the Nifty 50 Equal Weight Index Fund, which is an index fund that closely tracks the Nifty 50 index.
What is the Nifty 50 Equal Weight Index Fund?
The Nifty 50 Equal Weight Index Fundis an index fund that invests in the Nifty 50 index with a twist. Unlike other index funds that weigh the investments according to the market capitalization of the companies, this fund gives equal weightage to all stocks. That means that each of the 50 stocks on the index gets about 2% of the total money invested.
Consequently, stocks such as Tata Steel, Hindustan Unilever, JSW Steel, Bajaj Finserv, etc., that have a lower market cap weightage get just as much importance in the fund as the top stocks such as HDFC, RILor Infosys. If you want to check out the constituents and performance of the Nifty 50 index, check out ICICI Direct’s live updates of the same.
Why Should You Invest in the Nifty 50 Equal Weight Index Fund?
The Nifty 50 Equal Weight Index Fund gives you exposure to all the bluechip stocks of the Nifty 50 index. Being an index fund brings you advantages of that as well. Here are the top 5 reasons why you should consider investing in the Nifty 50 Equal Weight Index Fund:
Balanced Diversification #1
The Nifty 50 Equal Weight Index Fundexposes you to 13 different sectors and 50 companies that all have equal weight in the fund. That ensures that you have a well-diversified portfolio, giving you access to some of the top stocks in the country.
Equal Opportunity #2
Since the stocks are all equally weighted, all companies have an equal opportunity to perform and push up the value of your investment. You don’t have to count on a few stocks or particular sectors to perform well to reap returns.
Lower Risk #3
One of the most significant advantages of investing in the Nifty 50 Equal Weight Index Fund eliminates sectoral or company risks. In a Nifty 50 index fund weighted by market cap, specific sectors and companies get more importance in the fund. If they underperform, your returns will be impacted. For instance, almost 40% weightage is given to Financial Services in the Nifty 50 index. With the Nifty 50 Equal Weight Index Fund, your risks getspread out more evenly.
Benefits of an Index Fund #4
When you invest in this fund, you get all the benefits of investing in an index fund. That includes lower fees, non-biased investing, transparency, market exposure to a wide variety of stocks, periodic rebalancing and easy management since you don’t have to worry about how each of the stocks is performing. The fund manager does that for you.
A Variety of Ways to Invest #5
You can invest in the Nifty 50 Equal Weight Index Fund through a lumpsum amount, a Systematic Investment Plan, or a Systematic Transfer Plan, depending on the most comfortable route for you. Investments can also be started with as little as Rs. 500.
Conclusion
The Nifty 50 Equal Weight Index Fund provides an option for risk-averse investors to participate in the equity market without fear of excessive volatility. With an investment in this index, youinvest in top companies at comparatively lower fees. It is easy to invest in, easy to monitor and can be accessed through a variety of investment routes.
Disclaimer – ICICI Securities Ltd. ( I-Sec). Registered office of I-Sec is at ICICI Securities Ltd. – ICICI Venture House, Appasaheb Marathe Marg, Prabhadevi, Mumbai – 400 025, India, Tel No : 022 – 6807 7100. AMFI Regn. No.: ARN-0845. We are distributors for Mutual funds. Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.
Please note, Mutual Fund related services are not Exchange traded products and I-Sec is just acting as distributor to solicit these products. All disputes with respect to the distribution activity, would not have access to Exchange investor redressal forum or Arbitration mechanism. The contents herein above shall not be considered as an invitation or persuasion to trade or invest. I-Sec and affiliates accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon.
