Daniel Lin asked 2 years ago
I was wondering if it may be a better idea to invest in the S&P500 equal weighted instead of the S&P500 market weighted, as I am afraid that the latter's gains might be overly carried by Nvidia. What are your thoughts? Is it a good time to buy into the S&P500 given its high valuations, or should we wait for a better timing? Dollar cost average? Do you have any equal weighted ETFs to recommend? Thanks Rusmin.
1 Answers
Rusmin Ang Staff answered 2 years ago
Hi Daniel,
Comparing non equal (+27%) and equal weighted ETFs (+11%) return of S&P500 over last one year, the former will give you better overall return. Equal weighted ETF will give you more stability but it will also cap the upside return. So it really depends on your risk appetite. When I invest in S&P500, I would want to fully capture the return of the S&P500index. Equal weighted ETF will not be able to fully replicate that return.
There is one equal weighted S&P500 ETFs which is provided by BlackRock.
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