Equal weighting
A rule giving every holding the same weight regardless of company size or valuation: the simplest way to avoid concentrating a bet.
How to read the number
It gives smaller names more weight than capitalisation weighting does, so it behaves differently even on exactly the same list of companies.
When the metric lies
Equal weights are not equal contributions to risk: the money is the same in each, the dispersion is not. The rule also needs regular restoration of the equal shares, and each restoration costs commissions and a tax event.
Also known as: equal weight portfolio