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> A fund where the weighting is done by the square root of the market cap feels like it would make sense but I can't find anyone doing this Trading costs. A ca
by conditionnumber 1y ago
> A fund where the weighting is done by the square root of the market cap feels like it would make sense but I can't find anyone doing this
Trading costs. A cap-weighted portfolio manages itself. Square root cap weighting is going to trade a lot, and that's expensive.
- bspammer 1y agoAhh that makes a lot of sense, thanks. I hadn't considered how elegant it is that the fund stays balanced without trading.