EQL - EQL: Kind Of Easy To Do On Your Own

2024-06-06 01:52:52 ET

Summary

• ALPS Equal Sector Weight ETF offers a different weighting scheme to market-cap weighted averages, providing diversification and reducing sector concentration risk.
• EQL equal weights the 11 Select Sector SPDR ETFs, rebalancing quarterly, and offers a simple way to track sector performance.
• EQL has outperformed the Invesco's S&P 500 Equal Weight ETF since 2021, but both have underperformed the market-cap weighted S&P 500.

I've been very public about my concerns around market-cap weighted averages, given how much concentration risk there is currently in market-cap weighted averages. I've also been very public about my concerns about the Tech sector dominating "diversified" portfolios. Fortunately, there are products out there which can provide a different weighting scheme to markets, like the ALPS Equal Sector Weight ETF ( EQL ). This is an ETF that, at first blush, sidesteps conventional wisdom and offers long-term investors a new way to approach diversification. EQL is an ETF of ETFs that basically equal weights the 11 Select Sector SPDR ETFs, providing broad diversification that lessens the danger of sector concentration risk, rebalancing quarterly along the way....

For further details see: