DSP Investment Managers announced the launch of DSP Nifty 50 Equal Weight ETF, India’s First Exchange Traded Fund based on the Nifty 50 Equal Weight Index. In an equal weight index, each stock in it gets equal weight. It gives all companies in the index an equal chance to contribute to returns rather than being overly dependent on the top 10. DSP said that the DSP Equal Nifty 50 ETF, owing to its methodology, aims to provide better sector and stock diversification compared to Nifty 50 Index.
Apart from a diversified portfolio at a relatively lower cost, the Nifty 50 Equal Weight ETF offers the advantage of simplicity of buying and real time trading. The Equal Weight Index gets rebalanced on a quarterly basis. Owing to this quarterly rebalancing method, an equal weight portfolio has a built-in profit booking mechanism, in effect buying the underperformers at “low” and selling the outperformers at “high”. The New Fund Offer opens for subscription on October 18th and closes on October 29th, after which it will be purchased and sold on the exchanges.
