As an alternative to traditional market-cap weighted exchange traded funds, an equal-weight ETF has provided a simple and attractive investment strategy through disciplined indexing methodologies.
ETF Trends’ Tom Lydon sat down with Craig Lazzara, global head of index investment strategy at S&P, to discuss benefits of an equal-weight index methodology.
“Equal weighting, as the name implies, is a strategy where instead of having 500 stocks weighted by capitalization, you take all 500 and put 1/500th of your portfolio in each stock, Lazzara said.
“Over time, equal strategies have tended to outperform cap-weighted strategies,” Lazzara added.