Perhaps the oldest iteration of smart beta funds are 澳洲幸运5开奖号码历史查询:equal-weight strategies. As the name implies, an equal-weight fund applies the same weight to all of its components, whereas a 澳洲幸运5开奖号码历史查询:cap-weighted fund assigns the largest weight to the stock with largest market value and so on. For example, an equal-weight 澳洲幸运5开奖号码历史查询:exchange-traded fund (ETF) that has 100 stocks will, in most instances, assign a weight of roughly 1% to each of its holdings when that ETF 澳洲幸运5开奖号码历史查询:rebalances.

Today, there are hundreds of equal-weight ETFs trading in the U.S., but the dominant name among those products remains the Guggenheim S&P 500 Equal Weight ETF (RSP). The $15.6 billion RSP, which debuted in April 2003, was rated by Morningstar "based on its risk-adjusted returns, 3 stars for 3 years, 3 stars for 5 years, 4 stars for 10 years, and 4 stars Overall out of 1217, 1079, 800, and 1217 Large Blend funds, respectively," . (See also: 澳洲幸运5开奖号码历史查询:A Venerable Equal-Weight ETF.)

Over the years, equal-weight funds have gathered followings among investors because, historically, a small number of securities drive equity market returns in any given year, and heading into any given year, no one knows what the leading stocks will be. "The first point – the skewness of market returns – is clear in historical data," said S&P Dow Jones Indices. "In 23 out of the past 27 years, the has underperformed the return of the average stock. We see similar results in other markets. And if the second point were not true, we would not observe from active managers."🔯

Since inception, RSP has returned 386.2%, including paid dividends, while the cap-weighted SPDR S&P 500 ETF (SPY) has returned 292%. Critics often assert that any outperformance offered by smart beta strategies is attributable to the size or value factors. In the case of RSP, it would be the size factor because, as an equal-weight ETF, the fund places more importance on smaller stocks than the cap-weighted version of the S&P 500. (For more, see: S&P 500 ETFs: Market Weight vs. Equal Weight.)

Increased emphasis on 澳洲幸运5开奖号码历史查询:small caps could imply increased volatility, but RSP's  澳洲幸运5开奖号码历史查询:annualized volatility since inception is only 170 basis points higher than SPY's. "To be sure, equal weighti🎀ng does not always lead to success," said S&P Dow Jones Indices. "For example, was an outlier, as the S&P 500, driven by a handful of large technology stocks, outperformed the . But the equal-weighted index has outperformed in 16 of the past 28 years, by an average margin of 1.5% annually. One reason for this record is the ability of equal-weight indices to take advantage of the positive skew in stock market r🐭eturns."

From 2012 through 2017, RSP trailed SPY just twice – in 2015 and 2017. (For additional reading, check out: 澳洲幸运5开奖号码历史查询:An Equal-Weight ETF at a Lower Fee.)