Traditional capitalization-weighted index funds are lower cost, while alternative indexes often have higher exposures to size and value factors.
FORBES: No Free Lunch from Alternative Indexes
If Apple doubles in price, the manager of a capitalization-weighted fund can take the day off, neither buying nor selling.
FORBES: Betting Against Market Fads
The Index is a rules-based, modified global-capitalization-weighted, float-adjusted index intended to give investors a means of tracking the overall performance of a global universe of listed companies engaged in the solar energy industry.
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Indexes used in passive portfolios and for active management benchmarking should be broadly diversified and free-float capitalization weighted.
FORBES: Passive Investing Doesn't Exist, But So What?
The EAFE is free-float capitalization weighted.
FORBES: Split the EAFE for Better Returns
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