An equal weight ETF holds every company in its index in the same amount, then resets back to equal every few months. You get less of the giants and more of the mid-sized companies. MVW does this for about 75 large Australian companies and QUS for the S&P 500. It spreads your risk, but it costs more than a plain index fund, and it has lagged when the biggest companies lead the market.
Market cap weight vs equal weight
A normal index fund such as IOZ or VAS is market cap weighted. The bigger the company, the more of your money goes into it. In IOZ, BHP and Commonwealth Bank are about 10% each, and the top 10 companies make up roughly half the fund.
An equal weight fund gives each company the same starting share. In MVW, each of its roughly 75 companies starts at about 1.3%. So instead of 10% in BHP, you have about the same in BHP as in Codan, QBE or ASX Ltd.
Prices move between resets, so the weights drift. Each quarter the fund rebalances: it trims the companies that have risen most and tops up the ones that have fallen. That's a built-in "sell high, buy low" habit.
What you actually own
| IOZ (ASX 200) | MVW (equal weight) | |
|---|---|---|
| Companies | About 200 | About 75 |
| Biggest holding | BHP, about 11% | About 1.5% each |
| Top 10 share | About 50% | About 15% |
| Financials | About 34% | About 20% |
| Materials (miners) | About 24% | About 18% |
| Industrials and property | About 13% | About 23% |
The Australian market is unusually concentrated in banks and miners. Equal weighting spreads your money more evenly across industrials, property, health care and other sectors. In the US, the S&P 500's top 10 are around 39% of IVV, led by Apple, NVIDIA and Microsoft. In QUS, every company is about 0.2%, so technology falls from about 37% of the fund to about 10%.
Compare IOZ and MVW side by side →
How they have performed
| ETF | Fee | 1 year | 3 years a year | 5 years a year |
|---|---|---|---|---|
| MVW Australian equal weight | 0.35% | +0.8% | +8.7% | +6.3% |
| IOZ ASX 200 | 0.05% | +2.6% | +10.8% | +6.8% |
| QUS S&P 500 equal weight | 0.29% | +6.6% | +12.0% | +7.9% |
| IVV S&P 500 | 0.04% | +10.1% | +19.2% | +13.4% |
Total returns including distributions, to 30 September 2026, from the TMX Australia funds report.
Over the last five years both equal weight funds have trailed their market cap cousins. That's mostly about which companies led. In the US, a handful of giant technology companies drove most of the gains, and an equal weight fund deliberately holds less of them. In Australia, the big banks had a strong run.
It hasn't always been this way. Equal weight tends to do better when the rally broadens out and smaller and mid-sized companies catch up, as they did in parts of the 2000s. Nobody can reliably predict which way the next decade goes, which is why some investors hold a little of both.
The trade-offs
- Higher fees. MVW charges 0.35% and QUS 0.29%, against 0.04% to 0.07% for VAS, IOZ, A200 and IVV. On $100,000 that's roughly $250 to $300 more a year.
- More trading. Quarterly rebalancing means more buying and selling inside the fund, which can mean more capital gains distributed to you.
- A tilt to smaller companies. More in mid-sized companies can mean a bumpier ride in a sell-off.
- Currency. QUS is unhedged, so a falling Australian dollar boosts returns and a rising one hurts. HQUS is the hedged version.
Who might use one
An equal weight ETF can make sense as a satellite next to a plain index core, for investors who feel too exposed to the banks and BHP, or to a few US tech giants. It's less likely to suit someone who wants the cheapest, simplest way to own the market. If you already hold VAS, adding MVW lowers your reliance on the top 10, but check the overlap first.
See every equal weight ETF on the ASX → · Compare IVV, QUS and HQUS →
Common questions
What is an equal weight ETF?
An ETF that holds every company in its index in the same amount, rather than in proportion to company size, and rebalances back to equal on a regular schedule.
Is MVW better than VAS?
Neither is better in every market. MVW spreads your money more evenly and holds less in the banks and BHP, but costs 0.35% a year against 0.07% for VAS. To 30 September 2026, MVW returned 6.3% a year over five years against 6.5% for VAS.
Why has equal weight lagged the S&P 500?
Because a few very large technology companies drove much of the US market's return, and an equal weight fund holds much less of them. QUS returned 7.9% a year over five years against 13.4% for IVV.
How often do equal weight ETFs rebalance?
Usually every quarter. Check the PDS for each fund's exact schedule.
Joshua Stega is a financial adviser with 20 years' experience and the founder of ETF Adviser. He built ReviewETF to make every Australian ETF easy to find and compare.
General information only. It does not take into account your objectives, financial situation or needs. Consider the PDS and TMD before investing. Past performance is not a reliable indicator of future performance. Data as at 30 September 2026.