Alternative Weighting Strategies & ETFs: Is Market Cap Weighting Flawed?

by Michael Johnston on October 19, 2011

On Wednesday December 7, ETFdb.com will offer a free 1-hour webinar covering the basics of alternative weighting methodologies, including the potential advantages and drawbacks to each.

As the ETF boom has transformed indexes from hypothetical performance benchmarks into essentially investable assets, advisors and investors have begun to more closely examine the methodologies behind index construction and maintenance. And the findings from this increased scrutiny have been disconcerting, as the potential inefficiencies in market cap-weighting–a methodology underlying a huge portion of equity ETF assets–have jumped out as sources of return drag.

While market cap-weighting remains dominant in the ETF industry, innovation in the space has given rise to a number of alternative strategies that break the link between stock price and allocation within an index. While the choice of weighting methodology may seem like a minor decision, in reality it can have a major impact on bottom line returns and volatility.

Free ETF Webinar
Topic: Alternative Weighting Strategies in ETFs
Date: Wednesday, December 7
Time: 4 PM ET / 1 PM PT
CE Credits: 1.0 Hours (CFP Board)
Registration: Free

In a free 1-hour webinar, ETF Database will examine the various weighting methodologies now available through exchange-traded funds, highlighting the potential advantages and disadvantages of each.

Discussion topics include:

  • Evaluating market cap weighting strategies
  • Overview of alternative weighting methodologies
  • ETF strategies for accessing alternatives to market cap weighting
  • Q&A with expert panel

This webinar is approved for 1.0 hours of CE credits by the CFP Board. Register now; the webinar is free to attend but space is limited!

ETF Database is not an investment advisor, and any content published by ETF Database does not constitute individual investment advice. The opinions offered herein are not personalized recommendations to buy, sell or hold securities. From time to time, issuers of exchange-traded products mentioned herein may place paid advertisements with ETF Database. All content on ETF Database is produced independently of any advertising relationships. Read the full disclaimer here.

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Join the Discussion!

  • Mlonier

    Hi. Would like to attend, but the link leads to a todays meetings page, not a registration page….

  • Nssider

    Would like to attend Dec. 7 webinar but can’t. Will it be replayed? 

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