ETF Chart of the Day: Equal-Weighted Funds

August 12th at 10:03am by Paul Weisbruch, Street One Financial

On the heels of performance and asset gathering success with Rydex Equal Weight S&P 500 (NYSEArca: RSP), with the fund returning 67.92% versus the S&P 500’s 25.87% return since May of 2003 (the fund’s inception), Rydex|SGI launched a suite of equal weighted Russell index exchange traded fund earlier this year as well as those based on MSCI and and Standard & Poor’s indices.

These funds include Russell Midcap Equal Weight (NYSEArca: EWRM), Russell 1000 Equal Weight NYSEArca: EWRI), Russell 2000 Equal Weight (NYSEArca: EWRS),  MSCI Emerging Markets Equal Weight (NYSEArca: EWEM),  MSCI EAFE Equal Weight (NYSEArca: EWEF), MSCI ACWI Equal Weight (NYSEArca: EWAC),  S&P Smallcap 600 Equal Weight (NYSEArca: EWSM) and S&P Midcap 400 Equal Weight (NYSEArca: EWMD).

How have these funds done so far versus their market cap weighted benchmarks?

It is still too early to tell, but believers in the equal weighted methodology may find these appealing alternatives to build around already existing market cap weighted ETF positions in their portfolios.

Trading volume has been fairly light in these since inception, but do not mistake lower trading volumes for a lack of liquidity.

Each of the indices that these funds are based on are robust, deep, and liquid indexes, and that said, with the proper trade execution you can enter and exit larger positions in an orderly manner.

Russell Midcap Equal Weight

For more information on Street One ETF research and ETF trade execution/liquidity services, contact pweisbruch@streetonefinancial.com.

Read the disclaimer; Tom Lydon is a board member of Rydex|SGI.