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Which are better market cap weighted index funds or equal weight index funds?

Updated: 8/20/2019
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Barbarafriedberg1

Lvl 1
10y ago

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Market weight index funds weight the individual company's within the index by market capitalization (shares outstanding multiplied by share price). Equal weight index funds give equal weight in the fund to each company, regardless of its share price. When measuring the performance of each of these types of index funds there is no clear winner. Researchers Dash and Loggie found each type of fund outperformed during different market conditions. The S & P 500 equal weight index fund underperformed the market capitalization weighted fund during strong markets but seemed to perform better than the market cap weighted fund during weak markets.

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Q: Which are better market cap weighted index funds or equal weight index funds?
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