Since the launch of the first equal-weighted index in 2003, investors have enthusiastically embraced alternative weighted ETFs. In the past 10 years, the number of non-cap-weighted ETFs has grown from zero to 258, with assets exceeding $140 billion, according to Index Universe as of the end of 2012. These include a wide range of approaches—from equal weight to fundamental weight, to volatility weighted, to factor weighted, and more. Whether investors are looking for broad market indices, or regional, sector, and style-based strategies, they now have access to hundreds of new choices that track these indices for their portfolios.

The oldest of these alternative indices to gain wide acceptance comes from Standard & Poor’s. The S&P 500® Equal Weight Index (EWI), launched in 2003, is an equal-weight version of the flagship S&P 500® Index. The latter is weighted according to the market cap of the companies in the index, while the former gives the same index constituents equal weight and rebalances quarterly to maintain those weights.

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