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Smart Weighting is our proprietary indexing approach to help you get better diversification in your portfolio by more equally weighting style, size, and sector. Smart Weighting provides better mitigation against stock market bubbles that are inherent in traditional market-cap weighted indexes.

Benefits of
Smart Weighting

  • Better factor diversification
  • Increased return potential
  • Increased tax management opportunities
  • Avoidance of sector bubbles
  • Elimination of fund costs

Did you know that if you invest in a traditional market-cap-weighted index like the S&P 500, a few stocks that have already racked up big gains become a disproportionate share of your holdings?

Not only do you inherit higher exposure to potentially overvalued stocks, you also make huge sector bets and miss out on the opportunity of owning small-cap stocks all together. The logic behind these decisions is arbitrary and does not provide you with the proper diversification indexing is supposed to provide.

We believe the construction methodology of these indexes has inherent flaws which are costly over time and add unnecessary risk. Historical results strongly support our view. In order to address these issues, we created our own proprietary indexing methodology called Smart Weighting.

Smart Weighting takes a sampling of individual U.S. stocks to construct an index that more equally weights three key factors: economic sector, style, and size. The goal is to achieve a better risk-adjusted return while also benefiting from other value-adding opportunities.

Smart Weighting
Target Factor Exposure

We select securities to fill up each of the 12 style boxes in a way that adds up to roughly equal exposure to each of the 10 economic sectors across the portfolio.

Benefits of Your
Personal Strategy®

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