Has anyone used equal wt. index funds like RSP. Is it worth it?

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If you ignore the costs associated with rebalancing (trading fees, taxes, slippage, etc) then equal weighting has been shown to do better than value (market cap) weighting. Most research points to the fact that there is higher alpha generated in smaller capitalization stocks with what is now known as the “small-cap” effect. (I’ve linked you an article to read) Mind you that there is also conflicting research on the validity of the small cap premium and if there are limits to which the premium will continue to exist. If you equal weight a portfolio or an index you are generally going to see higher returns than that of a value weighted index if you don’t take into account the costs of trading/rebalancing I mentioned earlier.

http://www.aaii.com/o/modelportfolioarticletheadvantagesmicrocapstocks

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