Broad-market rally sees equal-weight funds outperform indices on returns

During the past one year, some funds in this domain have generated returns of 38-42 per cent. In comparison, the Nifty and Nifty 100 indices have gained less than 34 per cent

The broad-based rally in domestic equities have helped equal-weight funds steal thunder over their underlying market capitalisation-weighted indices.

During the past one year, DSP Equal Nifty 50 Fund, Principal Nifty 100 Equal Weight Fund and Sundaram Smart Nifty 100 Equal Weight Fund have generated returns in the range of 38-42 per cent. In comparison, the Nifty and Nifty 100 indices have gained less than 34 per cent.

An equal weight index assigns equal weightage to all components of the index. On the other hand, in a conventional m-cap weighted index, the weights are decided by the market value of the