Volatility is back with a vengeance as markets face some serious tariff-related turbulence. Whether tariffs are here to stay or not is anyone’s guess. But for investors, the time is now to adapt to short- to medium-term volatility. While many may simply add some extra bond income, or add some Treasury exposure for ballast, others may want to add equities. Plenty of equity strategies can help deal with an uncertain outlook. The equal-weight ETF EQL provides one notable option.
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The ALPS Equal Sector Weight ETF (EQL ), charges a 25 basis point fee. It tracks the NYSE Select Sector Equal Weight Index. In doing so, it aims to equally weight each sector of the overall economy. That ends up producing an index with a demonstrably different set of exposures than found in the S&P 500 itself.
An Equal-Weight ETF for 2025
The fund sees limited upside when a particular sector rallies. But it also limits downside if certain sectors struggle. Given how much tech rose in value last year, and the potential impact of tariffs on chips, EQL’s diversification could help. What’s more, with many firms in tech at red hot valuations, EQL could offer some beneficial exposure to more defensive, value-oriented sectors.
That approach has helped the equal-weight ETF return 16.3% in 2024, per SS&C ALPS Data. Its overall performance since inception has also been solid, returning 13.29% in that time.
What’s more, the uncertainty looming over markets may have already contributed to interest in the strategy. According to data from YCharts, EQL has seen its AUM rise almost 25% YTD as of March 5. That also lines up with a recent spike in momentum for the fund as indicated by its tech chart data The ETF saw its price rise above both its 50- and 200-day simple moving averages over the last month, according to YCharts data.
Markets continue to face real volatility to start 2025. For investors looking at equity options to adapt, EQL could provide a notable option.
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