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Tag Archives: equal weight

Nov 10, 2022

Examining Equal Weight

In this tumultuous market characterized by Fed rate hikes, elevated inflation and a strong dollar, mega-cap growth companies have suffered heavy losses, paced by recent “Big Tech” earnings disappointments from Meta, Microsoft, Alphabet, Amazon and others. The S&P 500® Top 50 declined by 19% over the past 12 months, underperforming the S&P 500 by 5%….

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Nov 9, 2022

Watch Your Weighting Scheme

2022 has witnessed a recalibration across financial markets, as investors have digested the impact of higher interest rates amid elevated inflation. Despite bouts of optimism that the U.S. Federal Reserve would take a more dovish stance, and better-than-expected corporate earnings, Exhibit 1 shows that the vast majority of large-, mid- and small-cap indices declined through…

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Jul 7, 2022

Tumultuous Trends

The S&P 500® posted its worst first-half performance since 1970,1 as inflation concerns, Fed rate hikes and slowing economic growth have weighed on markets. Mega caps were hit particularly hard, with the S&P 500 Top 50 posting a loss of 22%, underperforming the S&P 500 by 2%. Exhibit 1 shows that Information Technology was the…

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Jun 22, 2022

A Closer Look at Indexing Equal Weight

How does indexing equal weight work in times of volatility and inflation? S&P DJI’s Craig Lazzara and Invesco’s Nick Kalivas discuss the key drivers behind equal-weight’s historical outperformance vs. the benchmark and what happens when equal weight is combined with factors and/or ESG.

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Mar 30, 2022

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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Mar 14, 2022

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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Feb 10, 2022

Altcoins and Indices – Announcing Two Equal-Weight Indices Covering Largest Coins

In the rapidly evolving world of cryptocurrencies, one area that is getting a lot of attention is altcoins (or alternative coins). Generally, altcoins refer to cryptocurrencies other than Bitcoin. There are thousands of distinct cryptocurrencies that offer a wide variety of exposures. For instance, altcoins power decentralized finance (DeFi), infrastructure, gaming, the metaverse,1 and more….

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Nov 16, 2021

Can Equal Weight ESG Indices Pull Their Weight?

Research has shown that equally weighted indices have historically posted long-term outperformance1 over their benchmarks—largely driven by their exposures to small size and value along with associated risk premia, in addition to a healthy dose of concentration reduction.2 However, in accessing compensated factors and reducing concentration, the S&P 500® Equal Weight Index could elicit some…

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Aug 12, 2021

Exploring the Potential Implications of Market Reversals

How has the market’s response to the pandemic impacted the potential opportunity set? S&P DJI’s Anu Ganti and Hamish Preston examine where market reversals took place and what they could mean for active management and asset allocation strategies moving forward. Read on: Style Bias and Active Performance

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Jun 16, 2021

Sizing Up Style Returns

After more than a decade of underperformance, and in stark contrast to Growth’s dominance for much of 2020, Value has made an impressive comeback so far in 2021, outperforming Growth around the world, including across the size spectrum in the U.S. In fact, Value’s YTD outperformance against Growth in mid and small caps is the…

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