S&P Dow Jones Indices published a research paper Wednesday examining “the case for equally weighted indices as complementary benchmarks.”
Part of the analysis highlights the relative annual outperformance of the equal-weight equivalents to the S&P 500 and S&P Europe 350 indexes.
From the beginning of 2002 through May 31, 2014, the average outperformance of the equal-weight S&P 500 by year was 378 basis points, with a median of 310 basis points. The highest relative outperformance came in 2009 when the equal-weight index outperformed its capitalization-weighted counterpart by 19.8 percentage points.
The average annual outperformance for the S&P Europe 350 was slightly lower (322 basis points), but the median outperformance over the period was much higher at 480 basis points.
