Is First Trust India NIFTY 50 Equal Weight ETF (NFTY) a Strong ETF Right Now?

A smart beta exchange traded fund, the First Trust India NIFTY 50 Equal Weight ETF (NFTY) debuted on 02/14/2012, and offers broad exposure to the Asia-Pacific (Emerging) ETFs category of the market.

What Are Smart Beta ETFs?

Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.

Market cap weighted indexes work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.

There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.

Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other such characteristics.

Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.

Fund Sponsor & Index

The fund is managed by First Trust Advisors. NFTY has been able to amass assets over $211.49 million, making it one of the average sized ETFs in the Asia-Pacific (Emerging) ETFs. This particular fund seeks to match the performance of the NIFTY 50 EQUAL WEIGHT INDEX before fees and expenses.

The NIFTY 50 Equal Weight Index is an equally weighted index that tracks the performance of the 50 largest and most liquid Indian securities listed on the National Stock Exchange of India.

Cost & Other Expenses

When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.

Operating expenses on an annual basis are 0.81% for this ETF, which makes it one of the most expensive products in the space.

It's 12-month trailing dividend yield comes in at 0.88%.

Sector Exposure and Top Holdings

Most ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it's still important for investors to research a fund's holdings.

Taking into account individual holdings, Jio Financial Services Limited (JIOFIN.IS) accounts for about 2.47% of the fund's total assets, followed by Indusind Bank Limited (IIB.IS) and Bharat Electronics Ltd. (BHE.IS).

Its top 10 holdings account for approximately 22.72% of NFTY's total assets under management.

Performance and Risk

The ETF has added roughly 6.45% so far this year and is down about -1.06% in the last one year (as of 07/08/2025). In the past 52-week period, it has traded between $51.68 and $65.45

NFTY has a beta of 0.49 and standard deviation of 16.18% for the trailing three-year period. With about 52 holdings, it effectively diversifies company-specific risk .

Alternatives

First Trust India NIFTY 50 Equal Weight ETF is a reasonable option for investors seeking to outperform the Asia-Pacific (Emerging) ETFs segment of the market. However, there are other ETFs in the space which investors could consider.

WisdomTree India Earnings ETF (EPI) tracks WisdomTree India Earnings Index and the iShares MSCI India ETF (INDA) tracks MSCI India Total Return Index. WisdomTree India Earnings ETF has $3.37 billion in assets, iShares MSCI India ETF has $10.03 billion. EPI has an expense ratio of 0.87% and INDA changes 0.62%.

Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Asia-Pacific (Emerging) ETFs

Bottom Line

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This article originally published on Zacks Investment Research (zacks.com).

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