Equal weight vs market cap: what the NSE record shows for the same 100 companies

Two ways to hold the same companies

Every index answers two questions: which companies, and how much of each. The Nifty 50, the Nifty 100 and the Sensex answer the second with market capitalisation: a company worth five times another gets five times the weight. NSE uses free float market value, the shares available to ordinary investors, not those held by promoters.

An equal weight index keeps the same list and changes only the second answer. In the Nifty 50 Equal Weight each company is 2%; in the Nifty100 Equal Weight each is 1%. Prices then drift the weights apart, so the index resets them to equal at each periodic rebalance.

The note the Nifty 50 is 10 stocks plus 40 footnotes shows what that concentration means in rupees, and the Nifty 50 vs Sensex guide how the market cap indices are built.

The record: Nifty 100 against Nifty100 Equal Weight

NSE has published both versions of the Nifty 100 for long enough to compare them fairly. These figures are from NSE's daily closing values of the price indices, without dividends, from 31 Dec 2013, the first year end in the files for the equal weight series.

The gap at the end, 0.61 points a year to 2025 and 1.26 points a year to October 2026, is real but not large, and it was not earned smoothly. The equal weight index closed at a high on 23 Jan 2018 and did not close above it again until 3 Dec 2020: it lost 9.91% in 2018 and gained only 2.09% in 2019, while the Nifty 100 was up both years. An investor who chose equal weight over the Nifty 100 on 23 Jan 2018 was behind it until 3 May 2024, more than six years, and at the widest point, in March 2020, about 18% behind.

Year by year

The pattern is the same in both pairs. Equal weight won in strong, broad markets (2014, 2017, 2021, 2023), when hundreds of stocks rose together. It lost in 2018 and 2019, two years when a handful of the largest companies carried the index while most others fell. The Nifty50 Equal Weight beat the Nifty 50 in six of the eight years from 2018 to 2025, losing the same two years. In 2026, to 12 Oct, the equal weight versions are down less: −4.97% for the Nifty100 Equal Weight against −12.23% for the Nifty 100, and −8.88% for the Nifty50 Equal Weight against −14.41%.

Why equal weight behaves this way

Two mechanisms explain almost all of the difference.

A tilt towards the smaller names in the list. In a market cap index the 40 smaller Nifty 50 companies carry about 48% of the money; in the equal weight version they carry 80%. When mid sized large caps outrun the giants, equal weight wins. When the giants lead, it lags. This is a version of the size effect, covered in the size factor module.

A rebalancing habit. At every reset, the index sells some of what rose and buys more of what fell. In a market that swings back and forth, that earns a small premium; in a market where the same winners keep winning, it keeps cutting the best performers. That second case is exactly what 2018 and 2019 looked like.

Neither mechanism is a free lunch. More weight in smaller companies means more volatility, which is why the equal weight version fell further in the 2020 crash. The module on combining factors shows how weighting choices interact with factor exposures.

What it costs to hold equal weight

Market cap weighting is the cheapest way to hold an index because winners grow their own weight: the fund only trades when the list changes. Equal weight has to trade at every reset, so equal weight index funds and ETFs tend to charge a higher expense ratio and have more tracking error against their index. Check both on the factsheet; the tracking error calculator shows what a given gap costs in rupees over time.

Held stock by stock in your own demat, equal weight has a different cost: whole shares. Fifty stocks at 2% each means the most expensive share on the list sets the minimum amount, which the direct indexing guide works through. In return you get no expense ratio, each sale is your own tax decision, and the names change rarely, so most gains can be held past twelve months.

Equal weight in 2026 so far

The latest stretch is a useful reminder that the tilt works in both directions. From its record close of 27,256.25 on 26 Sep 2024 to 12 Oct 2026, the Nifty 100 fell 14.05%. Its equal weight twin, which closed at its own record of 35,730.70 a day later, was 9.69% below it on 12 Oct 2026. In 2026 alone, the largest companies fell harder than the average one: −12.23% for the Nifty 100, −4.97% for the equal weight version. That is the mirror image of 2018, when the giants held up and the rest fell. Neither year says much about the next one; together they show why the choice of weighting is a choice of which years you are willing to lag in.

When each one makes sense

• Market cap weight suits an investor who wants the market return at the lowest possible cost and is comfortable with a few companies driving it.
• Equal weight suits an investor who wants the same companies with less concentration, accepts more volatility, and can sit through two or three years of lagging the headline index without switching back.
• Both together is a reasonable choice too: a cap weighted core with an equal weight slice reduces concentration without betting everything on the tilt.

The worst way to use equal weight is to adopt it after a strong year for it and abandon it after a weak one. The how to beat the Nifty guide covers why the rules that have beaten the index all required staying with them through stretches like 2018.

How this shows up in RupeeCase

Nifty 50 Equal Weight holds the 50 Nifty companies at equal weight in your own demat, reset every 4 weeks: model CAGR 16.35%, deepest fall −15.71%, against an index line of 9.8%, as of 27 Apr 2026, from a minimum of ₹2,49,000 as of 8 Aug 2026. Its factsheet and rebalance history list every reset and every name, so you can see how rarely the list changes. You approve each rebalance; there is no expense ratio, only a fee of 0.2% of the value traded.

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