Thursday, October 8, 2026

Index funds: fewer stocks matter more than you think

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By conventional thresholds, where an HHI above 1,500 signals concentration, neither index appears concentrated at the stock level. A more intuitive lens is the effective number of stocks—how many equal-weight names the index behaves like. On that measure, the Nifty 50 averages 22, while the Nifty Next 50 comes in at 41. Two indices, identical stock counts, very different weight distributions.

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