Equal-weighting & Risk Diversification

Based upon our investment philosophy as well as statistical evidence, we apply an equal-weight concept to construct our portfolios. Frank Lingohr has practiced this discipline since the early 1980’s and has applied it at Lingohr & Partner from the very beginning of the firm.

"Take a simple idea and take it seriously."

- Charles Munger -

For us, equal-weighting means:

  • Equal-weighting on a country level
  • Equal-weighting on a single stock level

Using an equal-weight approach helps us avoid bulk risks and reduces the portfolio's dependency on price changes of single stocks. In addition, equal-weighting our portfolios leads to a broad diversification on a regional level.

The broad diversification of single stocks increases the probability to include more profitable stocks in the portfolio.

Equal-weighting of single stocks and countries leads to a systematic advantage compared to market-cap weighted indices because the weighting of portfolio positions does not depend on the price of a stock or a market.

Risk Diversification



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