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Sector weighting equally is based on diversification. Market cap weighting will tend to bet more on winners (the market cap is going up), concentrating your inv
by fawce 12y ago
Sector weighting equally is based on diversification. Market cap weighting will tend to bet more on winners (the market cap is going up), concentrating your investment there.
Another way to think about it: market cap weighting is a momentum strategy. Equal across sectors is mean reversion.