Tag Archives: Equal Weight Sectors
Towering Tech
The performance of large-cap Technology stocks so far this year has been exceptional, with the S&P 500® Information Technology sector outperforming the S&P 500 by 26% over the six-month period ending June 30, 2023—the 97th percentile of all observations in our database. Tech’s outperformance, driven by mega-cap strength, has been especially notable because of its…
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Equally Weighting within Sectors: Impact and Potential Applications
The outperformance of equal weight indices is well documented, especially for the S&P 500® Equal Weight Index’s 20 years of live history. Equal Weight’s relative returns reflect the impact of several important index characteristics. For example, smaller-size exposure and (anti-) momentum effects together account for around 75% of the historical variation of its relative returns….
Sizing Sectors
After peaks in S&P 500® concentration, the S&P 500 Equal Weight Index has tended to outperform, suggesting that there is a relationship between changes in concentration and the relative performance of equal weighting. But, does this relationship also occur at the sector level? Using the historical adjusted HHI (Herfindahl-Hirschman Index), we’ve previously established that concentration…
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2022, Anu Ganti, concentration, equal weight, HHI, IIS, Index Investment Strategy, institutional investor, S&P 500 Energy, S&P 500 Equal Weight, S&P 500 Industrials, S&P 500 Information Technology, S&P 500 Materials, S&P 500 Sectors, sector, sector concentration, sectors, U.S. Equities, U.S. sectors
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- 2022, Anu Ganti, concentration, equal weight, HHI, IIS, Index Investment Strategy, institutional investor, S&P 500 Energy, S&P 500 Equal Weight, S&P 500 Industrials, S&P 500 Information Technology, S&P 500 Materials, S&P 500 Sectors, sector, sector concentration, sectors, U.S. Equities, U.S. sectors
Contemplating Concentration
After the exceptional performance of large-cap stocks in recent years, concentration concerns naturally come to mind. There are many ways to measure concentration. A simple method is to add up the weight of the top names, but the drawback with this approach is it doesn’t incorporate all the constituents in an index. The Herfindahl-Hirschman Index…
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