EQWS takes an equal-weight position on the Russell 2000. Compared to the benchmark Russell 2000, the equal-weight methodology has a much lower financial tilt at 10.9% and smaller information technology position at 13.3%. The indexing methodology also makes the fund overweight micro-caps at 62.7% of the portfolio.
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“While small-caps and the Russell 2000 have led the most recent rally, the trend in the ratio between small-caps and large-caps has not yet broken out. Rather, the rally has left the ratio challenging a well-tested down-trend. Supporting a breakout in small-cap leadership is the improved relative strength leadership from small-cap industry groups versus their large-cap counterparts,” adds See It Market.
iShares Russell 2000 ETF
Tom Lydon’s clients own shares of IWM.