The reason I took a look at RSP is that Rob Arnott appeared on a recent episode of the Excess Returns podcast. I understood him to say that equal-weighting “breaks the link to price“, creating opportunities for alpha by “rebalancing and contra trading against noise in the market price”.Not surprisingly, RSP actually tracks fairly closely with IWR (Russell Midcap), which holds stocks 201-1000 in the Russell 1000, hence it would have a fair amount of overlap with the "small" end of the S&P 500.
I’m not sure I fully understood his comments, and maybe he was referring to a specific time period when RSP outperformed cap-weighted index funds. But still, it was kind of interesting that RSP has done reasonably well over a 20-year timeframe. So your explanation was helpful.
Statistics: Posted by Gaston — Sun Feb 02, 2025 10:19 pm — Replies 18 — Views 1511