Level the playing field in your Equity Portfolio!

In an equal-weighted portfolio, every stock is weighted equally, irrespective of its market capitalization, thereby avoiding stock and sector concentration risk. Periodic rebalancing ensures that weights remain aligned over time.

Market-cap weighted portfolios automatically allocate more money to stocks that have already risen in price. Over time, this leads to excessive exposure to a few market leaders, increasing vulnerability if those stocks underperform.

Equal weighting limits this structural risk. No single stock is allowed to dominate the portfolio, ensuring that setbacks in large names do not disproportionately impact overall performance.

Rebalancing is at the heart of equal weighting.

Stocks that have appreciated are trimmed.

Stocks that have underperformed are topped up.

This disciplined process systematically monetises gains and redeploys capital into fundamentally strong opportunities - something most investors struggle to execute emotionally.

In a market-cap weighted portfolio, many of tomorrow’s leaders may remain underrepresented for years.

Equal weighting gives them meaningful capital allocation from the outset, thereby helping improve participation in the early phase of growth rather than after the bulk of returns have already been captured.

Because exposure is evenly spread, the portfolio is less sensitive to sharp drawdowns in a handful of stocks or sectors.

Consider the below illustration comparing the performance of an equally-weighted portfolio of India’s top 50 bluechips and a free float market-cap weighted portfolio of the same stocks.

The Nifty50 Equal Weight TRI has outperformed the Nifty 50 TRI over the long term

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