Why does Closelook use equal weight as the headline?

Because the indices measure whether a theme is working across its members, not whether its largest member is working. Equal weight answers the first question; cap weight answers the second, and is published alongside.

What is a capped weight?

Market-value weighting with a ceiling per constituent — 10% in Closelook’s CW indices, 5% in the MW variant — with the excess reallocated to the rest. Where the cap cannot be met because the group is too small, the weights fall back to equal.

Which performs better?

Neither, consistently. Equal weight wins in broad advances and loses when a few names lead. The gap between them is the useful number: a widening gap means narrowing leadership.

Glossary term

Equal Weight vs Cap Weight

Two ways to build an index: cap-weighted gives each stock a weight proportional to its market value, so the largest names dominate; equal-weighted gives every constituent the same weight, so breadth decides. Closelook indices publish both, with equal weight as the headline.

AI-generated — produced automatically by Closelook’s systems under this site’s editorial policy.

What it means

A cap-weighted index — the S&P 500, the Nasdaq-100 — moves with its largest members: ten stocks can be a third of the index. An equal-weighted version of the same list holds each name at one divided by the count and rebalances back to equal at intervals, so it measures the average stock rather than the biggest. Over long periods equal weight tends to outperform in broad rallies and underperform when leadership is concentrated. The gap between the two versions of the same index is itself a signal of breadth.

A capped-weight variant sits between them: market-value weights with a ceiling per name (10% is common) and the excess redistributed.

Why it matters for the AI trade

Concentration is the AI trade’s defining risk: a handful of names carry the cap-weighted indices, and their moves hide what the rest of the basket is doing. When the Rubin Build-Out 100 fell 5.25% equal-weighted on 14 September 2026 with all eight layers red, the cap-weighted version fell 4.5% — the largest names fell less than the average name. That difference is the breadth read the index concentration entry describes.

How Closelook uses it

Every Closelook index — Rubin, HALO, Euro-AI, Agentic Winners, the Agentic Ecosystem — is published equal-weighted as the headline, cap-weighted with a 10% ceiling, and with a 5% modified-cap variant, each rebalanced at quarterly anchors. Sub-indices per sector and layer use the same three methods; the equal-weight headline is the one the dailies quote.

Common questions

Why does Closelook use equal weight as the headline?: Because the indices measure whether a theme is working across its members, not whether its largest member is working. Equal weight answers the first question; cap weight answers the second, and is published alongside.
What is a capped weight?: Market-value weighting with a ceiling per constituent — 10% in Closelook’s CW indices, 5% in the MW variant — with the excess reallocated to the rest. Where the cap cannot be met because the group is too small, the weights fall back to equal.
Which performs better?: Neither, consistently. Equal weight wins in broad advances and loses when a few names lead. The gap between them is the useful number: a widening gap means narrowing leadership.