How to Choose Between Weighted Funds

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Published November 5, 2018

Published November 5, 2018

"Equally weighted funds offer investors an opportunity to tilt their portfolio toward smaller companies rather than the few large companies that dominate most (cap-weighted) indexes, says Joshua Escalante Troesh, founder of Purposeful Strategic Partners in California.

"Considering that over a third of the money in an S&P 500 cap-weighted index is invested in the largest 25 companies, equally-weighted funds will also provide a little more diversification," he says.

. . .

"Smaller companies have historically performed better than larger companies, so an equally-weighted fund theoretically could perform better than a cap-weighted fund in the same index," 

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Joshua Escalante Troesh is the President of Purposeful Strategic Partners and a tenured professor of Business at El Camino College. To explore working with him on your personal financial planning and investment advising needs, simply schedule a free Discover Meeting.

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