What is 'Equal Weight'
Equal weight is a type of weighting that gives the same weight, or importance, to each stock in a portfolio or index fund. The smallest companies are given equal weight to the largest companies in an equalweight index fund or portfolio. This allows all of the companies to be considered on an even playing field.
BREAKING DOWN 'Equal Weight'
The Rydex S&P Equal Weight Exchange Traded Fund, for example, provides the same exposure to the smallest companies in the S&P 500 as it does to corporate giants such as General Electric and Exxon.
Equal weighting differs from the weighting method more commonlyused by funds and portfolios in which stocks are weighted based on their market capitalizations. Equalweighted index funds tend to have higher stock turnover than marketcap weighted index funds and, as a result, they usually have higher trading costs.

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