Worth the Weight

S&P Global

Tim Edwards, Anu Ganti, Hamish Preston

Research

19 Pages

S&P Dow Jones Indices examines the S&P 500 Equal Weight Index’s historical outperformance, identifying the structural and factor-based drivers behind its returns relative to the traditional market-cap-weighted benchmark.

Key Takeaways

High Concentration: U.S. equities show near-record concentration, increasing the appeal of diversification through equal weighting.
Return Drivers: Outperformance has been driven by smaller-cap exposure, intra-sector weighting, and an anti-momentum tilt.
Benchmark Efficiency: Over the past 20 years, nearly all active U.S. equity funds have underperformed the equal weight index.
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