Content tagged: weighting

There are many different ways indexes can be constructed such as capitalization weighting, equal weighting, dividend weighting, and revenue weighting. In this article, we look at various ETFs and how much they have grown based on the different methods of weighting. more »

Altering the way in which you weight the components of a particular index can have a profound impact on returns. In fact, just recently we have seen the equal weighted S&P 500 Index return to its all time high, while its cap-weighted counterpart remains 15% away from its 2007 high water mark. more »

Using different weighting methodologies can greatly effect the returns of your portfolio. For example, if you had held the 500 stocks within the S&P 500 Index over the last five year on an equal weighted basis you would have outperformed a cap weighting strategy by 17.41%! more »