KingC (@RaphGM) en getquin

10Lun·

Equal-Weight ETFs

In recent weeks I have read quite often that equal-weighted ETFs are currently a good strategy, as the S&P500, but also other indices, have become quite expensive and concentrated (e.g. with the "Magnificent Seven").

A strategy where all stocks would be equally weighted would bring more returns in such times.

Barron's also writes in its article that actually over the long term (20 years), equal-weight S&P500 ETFs yield more than the classic market-cap-weighted index (11.5% instead of 10.3%).

My question is then:

- Do you guys follow such strategy?

- What do you think?

- Do you already have such an ETF in your portfolio?

Here are a few examples of distributing ETFs that I have found:

$SPES (+0,79 %)

$TEET (-0,34 %)

$TSWE (+0,24 %)

I honestly don't have an opinion on this yet, but I will certainly research this topic.

Thank you! 😊

15 Comentarios

GeldmitKopf@cashwithhead

10Lun

I think a good cap on the upside is better. I think all balance is too much for a yield destroyer

•

Hennington Research🎄@HennRes

10Lun

Sounds interesting. I'll read up on it!

•

Lukas M.@Lukas2998

10Lun

In principle, that sounds interesting. But ultimately it's also a bet that doesn't necessarily work out. It has been said for years that the big tech companies carry so much weight. It may be that other companies will catch up over the next few years, but it may well be that Apple and co. will continue to outstrip them over the next few years.
There is no way of knowing which variant will perform better and the potential excess return is also very small. I wouldn't switch to this.

•

Ver todas las 2 respuestas adicionales

Beat The Bank@randomdude

10Lun

My opinion on this: It's a question of faith. Depending on the index selection and the period under consideration, you can calculate the desired result. According to this comparison (https://extraetf.com/de/etf-comparison?products=IE00BLNMYC90-etf,IE00B5BMR087-etf), you would have done much better with the capitalization-weighted S&P 500 ETF over the last 10 years.
(Attention: There is a data error in mid-November '23 with the equal-weighted ETF. Set the observation period from July 1, 2014 to November 15, 2023).

•

AlexSch@AlexSch

10Lun

I do it the other way around. I overweight the Magnificent 7 (and a few more tech stonks).

•

Rmann@Epi

10Lun

Always ask yourself: what is the data basis for the statements? For example, 20 years is rather short. Around 2000, highly capitalized stocks in the USA fell significantly, and it is clear that the Equalweight Index performed better there. The whole thing reversed from 2009 onwards. There are always such changes in the USA in 1970, for example, and also depending on the market in 1990 in Japan, for example.

Incidentally, the statements about the last 20 years are only correct for a one-off investment in US indices. Anyone who started a savings plan at the beginning of the 2000s will have performed better with market cap weighted than with equal weighted.

Don't be confused by unverified statements from so-called experts! 😅👍

•

Heinrich@stock_strategist_86

10Lun

I had the same discussion. Because someone didn't want to invest only in the MSCI World (because of too much tech). I then considered $TSWE as an addition. But I haven't finished the process yet.

•

Joker@Blizzard

10Lun

Given the upcoming presidential elections in the USA, this sounds really interesting. Especially that the share is around 37%. 😅

••

Ver todas las 3 respuestas adicionales

Testo-Investor@Testo-Investor

10Lun

No, I don't care either. Total nonsense! The S&P 500 is the absolute top dog in the long term!

••

Testo-Investor@Testo-Investor

10Lun

And the expensive topic is even more nonsense! Anyone who is not fully invested this year will continue to miss out on mega returns in the
Ki and semiconductor sector !!! So all in !!! Light weight

••