Comments on: Equal-Weight S&P 500 Index http://www.investingintelligently.com/2007/02/04/equal-weight-sp-500-index/ Not just another (Canadian) financial blog Tue, 16 Mar 2010 22:40:47 +0000 http://wordpress.org/?v=abc By: Dave http://www.investingintelligently.com/2007/02/04/equal-weight-sp-500-index/#comment-5742 Dave Mon, 05 Feb 2007 01:38:45 +0000 http://www.investingintelligently.com/2007/02/04/equal-weight-sp-500-index/#comment-5742 You could be right, the risk-adjusted return might be the same or worse in the equal-weighted one. I don't see much greater risk in the smaller companies in the S&P as they are still above $2 billion in market cap which is pretty big. You could be right, the risk-adjusted return might be the same or worse in the equal-weighted one. I don’t see much greater risk in the smaller companies in the S&P as they are still above $2 billion in market cap which is pretty big.

]]> By: Enough Wealth http://www.investingintelligently.com/2007/02/04/equal-weight-sp-500-index/#comment-5741 Enough Wealth Mon, 05 Feb 2007 00:43:08 +0000 http://www.investingintelligently.com/2007/02/04/equal-weight-sp-500-index/#comment-5741 I'd also expect an equal weighted index to have higher volatility than a market weighted index, as small and mid-sized companies tend to have more volatile earnings than larger companies. So, if you look at risk-adjusted return, the equal weighted index may underperform the market weighted index after allowing for rebalancing costs (I just guessing, as I don't have any data to back this up). Regards http://enoughwealth.com I’d also expect an equal weighted index to have higher volatility than a market weighted index, as small and mid-sized companies tend to have more volatile earnings than larger companies.

So, if you look at risk-adjusted return, the equal weighted index may underperform the market weighted index after allowing for rebalancing costs (I just guessing, as I don’t have any data to back this up).

Regards
http://enoughwealth.com

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