Regularly rebalancing a portfolio to one's target allocation is said to have a positive impact on the overall returns (e.g. Maintaining bonds vs stock levels). I get that argument.
However, I have a hard time understanding the following: if regular rebalancing is so great and important, wouldn't it make sense to adopt equal-weight ETFs rather than the common ones weighted by market cap? I will still need to rebalance between asset classes as described above but would get automated rebalancing within one asset class.
I am sure there is a reason why equal weight ETFs are not that commonly used, but I just don't get it at the moment. Thanks for your help!
Submitted May 19, 2019 at 04:08AM by AccomplishedGuest http://bit.ly/2JS4p6H
