FTB-C000148 / Financial concept

Equal-Weighted Index

An equal-weighted index assigns the same target weight to each eligible constituent at a specified rebalance.

Also known asequal weight index

Intermediate Formula defined 2 linked topicsPublished

Definitions

In plain terms

With 20 constituents, each begins at a 5% target weight before market movements cause weights to drift.

Technical

The methodology must define rebalance dates, target population, pricing, share calculation, corporate-action handling, rounding, turnover, and treatment between rebalances.

Scope

Weights are equal only at the defined reset and can drift afterward.

Formula

w_i = 1 / N
LaTeX: w_i=1/N
SymbolMeaningUnit
Nnumber of eligible constituents at rebalancecount

Output unit: decimal weight

Examples

  • A governed index record identifies equal-weighted index with its applicable methodology version, effective time, source, and units.

Common misconceptions

  • Equal-Weighted Index does not have one universal implementation without the named index methodology, data cutoff, and governance context.

Concept relationships

Prerequisites

Broader concepts

Contrasts with

Where this concept is used

Tutorials planned

These catalogued topics use this concept, but their complete build has not shipped yet.

  • D03-F02-A06 Primary
  • D03-F03-A05 Important

Evidence and governance

  1. S&P Dow Jones Indices Index Mathematics Methodology S&P Dow Jones Indices · first party methodology

    Supports: preferred label, short definition, technical definition, formula

    Limits: Authoritative for the provider's indices; conventions are not universal defaults for every index or security-level return series.

  2. Fintech Builder Glossary Definition Contract The Fintech Builder · internal governed contract

    Supports: variant distinction

    Limits: Defines governed platform behavior rather than claiming these policies are universally prescribed by external McClellan methodology.

Reviewed by
Last reviewed
2026-07-27
Next review
2027-07-27
Record status
published
Written by

Fintech engineer building market-data and financial systems, and the author of every article, glossary record, and reference implementation on The Fintech Builder.