ICICI Prudential Mutual Fund launches Nifty50 Equal Weight Index Fund

ICICI Prudential Mutual Fund has launched the ICICI Prudential Nifty50 Equal Weight Index Fund. The scheme will invest in the constituents of the Nifty50 Equal Weight Index.

The scheme will be managed by Kayzad Eghlim and Nishit Patel.

“Since indices perform differently under variable market conditions, it is prudent to diversify across indices with different weightage methodology.

Nifty50 Equal Weight Index is less concentrated in the top 5 sectors as compared to the Nifty 50 Index, thus providing an excellent diversification opportunity. Also, there is no size bias as the index tries to reduce the impact of bigger companies on the index performance,” says Chintan Haria, Head- Product Development & Strategy, ICICI Prudential AMC.

According to the fund house, the Nifty 50 Equal Weight Index invests in the top 50 stocks in India based on market capitalization. An equal weight index has empirically higher dividend yield as compared to a market capitalization weighted index as it allocates funds equally to its components. According to the press release, the scheme exhibits smart-beta characteristics as the index intends to have no size bias. The index is less concentrated and helps in providing stability to the portfolio.