Equal Weight vs. Market Cap Weight Index Funds | Rational Reminder 394

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Equal-weighted index funds sound like an elegant solution to some of today’s biggest investor anxieties: high market concentration, elevated valuations, and outsized influence from a handful of mega-cap stocks. In this episode of the Rational Reminder Podcast, Ben Felix, Dan Bortolotti, and Ben Wilson take a deep, evidence-based look at whether equal weighting actually improves portfolios—or simply introduces new risks under a different name. The discussion breaks down how equal-weighted indices differ fundamentally from traditional market-cap-weighted indexes, why equal weighting has historically outperformed in certain periods, and what’s really driving those results beneath the surface. The team explains how equal weighting tilts portfolios toward smaller, cheaper, and more volatile stocks, while also systematically trading against momentum due to frequent rebalancing.

Timestamps:

0:00:00 Intro
0:04:50 Main Topic: Equal Weight vs Market Cap Weight Index Funds
0:06:32 Market Cap Weighting
0:29:31 Volatility and Equal Weighting
0:38:18 Momentum
0:45:29 The Dimensional US Core Equity 1 Fund
0:50:21 The Dimensional US Core Equity 1 Index
1:06:22 Aftershow

Links From Today’s Episode:

Rational Reminder on iTunes — https://itunes.apple.com/ca/podcast/t....
Rational Reminder on Instagram —   / rationalreminder  
Rational Reminder on YouTube —    / channel  
Benjamin Felix — https://pwlcapital.com/our-team/
Benjamin on X — https://x.com/benjaminwfelix
Benjamin on LinkedIn —   / benjaminwfelix  
Dan Bortolotti — https://pwlcapital.com/our-team/
Dan Bortolotti on LinkedIn —   / dan-bortolotti-8a482310  
Ben Wilson on LinkedIn —   / ben-wilson