Amidst sell-off, Nifty Top 10 Equal Weight Index looks like a good bet

Mumbai: Investors with a higher risk appetite looking to bet on India’s top large-caps following the recent market sell-off may consider schemes tracking the Nifty Top 10 Equal Weight Index – a measure offering exposure to the top 10 stocks by market capitalisation.

The index’s recent underperformance compared to the broader benchmark Nifty presents a potential buying opportunity, according to fund officials and financial planners.

“Diversified portfolio across six key sectors, reasonable valuations, recent underperformance relative to the Nifty 50, and a margin of safety in mega caps are driving investor interest in this index,” said Anil Ghelani, head – Passive Investments and Products, DSP Mutual Fund.

The Nifty Top 10 equal-weight has lost 7.8% so far in March amid the West Asia conflict, compared with the Nifty’s decline of 7.4%. In 2026, the index shed 14.7% compared with the 10.9% fall in the Nifty, according to ETIG.

The recent underperformance was driven by foreign institutional selling of stocks here, with large-caps bearing the biggest brunt of their risk-off sentiment.

The index’s components include Infosys, Reliance Industries, ITC, TCS, HDFC Bank, ICICI Bank, Kotak Mahindra Bank, Axis Bank, Hindustan Unilever and Larsen & Toubro, and is rebalanced quarterly.”This fund works well for those who are comfortable with concentrated portfolios and not worried about short-term drawdowns,” said Anup Bhaiya, MD and CEO, Money Honey Financial Services.

The price-to-earnings (PE) ratio of the Nifty Top 10 Equal Weight Index is 18.6 times compared with the Nifty’s 20.4 times. Ninety per cent of the portfolio is available at or below average valuations, as per the DSP MF study.

“Investors looking for passive exposure to large caps without actively tracking portfolios could consider staggering investments over the next three months,” said Nikhil Gupta, founder of Sage Capital.

While the index has delivered slightly higher returns than the Nifty 50 over the long term, its outperformance has not been consistent, beating the benchmark in just over half of the past 19 years. Over this period, it has delivered an annualised return of 13.3%, compared with 12.3% for the Nifty.