Except for some replies to posts I didn’t see any discussion about MWEQ.
In my understanding, and for a strictly passive strategy following the market behavior, to have a portfolio of equal weighted world’s stocks is the best option in the long term.
I’m observing it since 3 months and it’s beating my VT, I know is not enough to judge, but if without having the high weight of the big ones running the bull market is still beating VT, it looks promising to me, what’s you opinion about this?
I see that on IB is listed in UK, DE, CH,… there would be a difference in buying one or the other?
Probably not a bad fund. But I have a hard time believing they can keep internal trading costs down enough for it not to underperform longterm. To keep the equal weight, they have to rebalance/trade constantly. And 1400 Positions is a lot.
To date, I hold a combination of VanEck‘s Large Cap Equal Weight (with an ESG Screen) and iShares Mid Cap Equal weight. The new ETF is interesting and I an actively watching its performance. I think it would beat my combination of ETF.
There is just one thing you need to consider. From a tax point of view, its not efficient. The ETF holds 100% of an (IE? lUX? I forgot) Index Fund. Meaning that there was a full 30% Tax Drag on US shares.
In my view, its still worth the Investment but considering the Tax Drag, I want to wait for a full year and a bit more before I finally evaluate its performance.
The fund has 10B AUM and probably sees a constant inflow and outflow. Besides, it exists for something like 8 years already, if I remember correctly. Ultimately, with an equal weight Portfolio, there is no harm done if you are a bit off left or right. Thats a big difference to a cap weight Portfolio where you (at least on Large Caps) want to be 100% right. With Equal Weighting and considering this was no ETF but a fund, the Fund Admin can constantly hold a few standing. Orders so that it re-balances those shares back to the target, where Mr Market provides the right and required volume. I would be more hestitant if this was a genuine ETF.
And there is huge difference between the van eck fund holding 250 stocks and the equal weight msci world holding 1400. The less positions, the easier it is.
MWEQ is not a normal ETf. Its a „Feeder ETF“ that invests 100% of assets into an Index Fund. Said Index Fund had about 10B of assets and something like 8 years of shelf life. Please don‘t wuote me on numbers, but it is a HUGE Fund. Given it was a fund, there was just no IE Tax Benefit on US Shares…
Thanks you for the precious infos.
Ho do you know that there is a fund behind it? I wasn’t able to get this info looking at the invesco website …
I would love to have the same etf with the usual benefits that we have with us etfs, but it lloks like there is a lack of interest in these equal weight etfs.
Have a look at the description. Looks like the underlying Fund hat 18B, thats massive.
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