AlphaPro HEX ETF will use an equal weight methodology, which means on a semi-annual basis the portfolio is rebalanced so that each stock is given a proportionally equal weight in the portfolio. An equal weight methodology tends to reduce single stock and sector concentration risk versus the more traditional cap-weighted methodology, where the proportional weight of the stock in the index is based on its market capitalization. The semi-annual rebalancing of the portfolio means the ETF tends to sell stocks that have risen in value and buy greater amounts of stock that have lower valuations.
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