• Equal weight is a proportional measure that gives equal weight to each stock in a portfolio or index fund, regardless of company size.

  • Equal weighting is different from market capitalization weighting, which is more commonly used by indices and funds.
  • The concept of equally weighted portfolios has generated interest due to the historical performance of small cap stocks and the emergence of multiple exchange-traded funds (ETFs).
  • Equivalently weighted index funds tend to have higher stock turnover than market capitalization-weighted index funds, and as a result, they typically incur higher trading costs.