By: Catherine Yoshimoto, Senior Index Product Manager
The "Keep It Simple & Straightforward" (KISS) principle states that most systems work best if they are kept simple rather than made complicated. While KISS has its origins in aircraft engineering, the concept can also be applied to indexing. What could be simpler than constructing an index by applying equal weights to each sector? And what effect would this re-weighting of the index have on its performance compared with its more traditional market-cap weighted counterpart?