Content and data provided by various third parties and Fidelity − Terms of Use | Help/Glossary
Research > ETFs > ETF / ETP Commentary > 

The Power of 11: How EQL Neutralizes Single-Sector Dependency

BY | ETF Database
10:31 am ET 11/09/26 | 24 VIEWS
  • Related Symbols
  • EQL
When investors buy an ETF tracking a broad market index like the S&P 500, most assume they are getting full exposure across the entire U.S. economy. In reality, they are not. The index is weighted by company size, so the biggest names get the largest share of an investor’s money, and right now that means a handful of tech giants. When those few have a downturn, your whole portfolio feels it. Consider, then, funds like EQL.Key Takeaways: Traditional market-cap weighting concentrates portfolios into a handful of mega-cap tech giants, whereas the ALPS Equal Sector Weight ETF (EQL B) splits exposure evenly across all 11 S&P 500 sectors (~9.09% each). Quarterly rebalancing systematically trims outperforming sectors and funnels capital into discounted or lagging areas without emotion. Maintaining a sector-neutral baseline acts as a structural shock absorber, helping investors capture broader market upside when leadership shifts. Rebalancing Cap-Weighted Concentration With EQLThe ALPS Equal Sector Weight ETF (EQL) offers a disciplined, rules-based strategy designed to bring back real diversification to large-cap equity portfolios. EQL tracks the VettaFi Modelist Equal Weight Sector 500 Index, which evenly divides large-cap U.S. stocks across 11 sectors. Each sector gets a 9.09% allocation at each rebalance, allowing EQL to break free from cap-weighted concentration. It rebalances quarterly, systematically trimming outperforming sectors and reallocating to undervalued areas, providing a buffer against market swings while delivering balanced equity exposure. The fund’s top five sectors as of November 6 are finance (17.87%), technology services (10.04%), utilities (9.7%), retail trade (9.4%), and health technology (8.4%), according to VettaFi data. Its top three holdings are Google (4.31%), Amazon (3.89%), and ExxonMobil Holdings Corp. (2.59%). EQL attracted $28 million in net inflows over the past month, driven largely by energy and consumer staples stocks leading a broader October rally in its underlying index.The Mechanics of Equal Weighting: How Rebalancing WorksThe real action in an equal sector weight fund is the quarterly rebalance. A regular cap-weighted index lets its winners keep growing. The more a sector’s value goes up, the bigger its share of the fund gets, so you end up owning more of whatever is already priciest. EQL does the opposite of this by resetting all 11 sectors quarterly to the same target. If a sector like energy or healthcare has a big upward swing, the strategy trims the gainers and reallocates that money into the sectors that lagged or pulled back. This strategy systematically locks in gains and buys undervalued areas — removing emotional market timing from the equation. Because market leadership inevitably rotates, capital will eventually move out of crowded tech and into steadier sectors like consumer staples, utilities, or energy. For more news, information, and analysis, visit the ETF Building Blocks Content Hub. VettaFi LLC (“VettaFi”) is the index provider for EQL, for which it receives an index licensing fee. However, EQL is not issued, sponsored, endorsed, or sold by VettaFi, and VettaFi has no obligation or liability in connection with the issuance, administration, marketing, or trading of EQL.

More Commentary

Clients, Advisors See Different Needs on Wealth Protection: Buffer ETFs Help
BY | ETF Database
10:27 am ET 11/09/26 | 15 VIEWS
Revisiting the Retirement Blueprint: Goldman Sachs GPIX & GPIQ
BY | ETF Database
4:19 am ET 11/09/26 | 46 VIEWS
New Bitcoin Book Weighs Both Sides of the Coin
BY | ETF Database
3:54 am ET 11/09/26 | 26 VIEWS
View more Commentary

Search Commentary

Enter Keyword(s)
Filter Results

Performance data shown is past performance and is no guarantee of future results. Current performance may be higher or lower than the performance data quoted. Yield and return will vary, therefore you have a gain or loss when you sell your shares. For standard quarterly performance, go to the fund's Snapshot page by clicking on the ETF/ETP's symbol.

ETFs may trade at a premium or discount to their NAV and are subject to the market fluctuations of their underlying investments.

For iShares ETFs, Fidelity receives compensation from the ETF sponsor and/or its affiliates in connection with an exclusive long-term marketing program that includes promotion of iShares ETFs and inclusion of iShares funds in certain FBS platforms and investment programs. Please note, this security will not be marginable for 30 days from the settlement date, at which time it will automatically become eligible for margin collateral. Additional information about the sources, amounts, and terms of compensation can be found in the ETF's prospectus and related documents. Fidelity may add or waive commissions on ETFs without prior notice. BlackRock and iShares are registered trademarks of BlackRock, Inc. and its affiliates.

FBS receives compensation from the fund's advisor or its affiliates in connection with a marketing program that includes the promotion of this security and other ETFs to customers ("Marketing Program"). The Marketing Program creates incentives for FBS to encourage the purchase of certain ETFs. Additional information about the sources, amounts, and terms of compensation is in the ETF's prospectus and related documents. Please note that this security will not be marginable for 30 days from the settlement date, at which time it will automatically become eligible for margin collateral.

News, commentary (including "Related Symbols") and events are from third-party sources unaffiliated with Fidelity. Fidelity does not endorse or adopt their content. Fidelity makes no guarantees that information supplied is accurate, complete, or timely, and does not provide any warranties regarding results obtained from their use.

Any data, charts and other information provided on this page are intended to help self-directed investors evaluate exchange traded products (ETPs), including, but limited to exchange traded funds (ETFs) and exchange traded notes (ETNs). Criteria and inputs entered, including the choice to make ETP comparisons, are at the sole discretion of the user and are solely for the convenience of the user. Analyst opinions, ratings and reports are provided by third-parties unaffiliated with Fidelity. All information supplied or obtained from this page is for informational purposes only and should not be considered investment advice or guidance, an offer of or a solicitation of an offer to buy or sell a particular security, or a recommendation or endorsement by Fidelity of any security or investment strategy. Fidelity does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating ETPs. Fidelity makes no guarantees that information supplied is accurate, complete, or timely, and does not provide any warranties regarding results obtained from their use. Determine which securities are right for you based on your investment objectives, risk tolerance, financial situation and other individual factors and re-evaluate them on a periodic basis.

Before investing in any exchange traded product, you should consider its investment objective, risks, charges and expenses. Contact Fidelity for a prospectus, offering circular or, if available, a summary prospectus containing this information. Read it carefully.