When I look at an ETF, I often see the weight in fund compared to a benchmark. For instance:

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[Source] http://portfolios.morningstar.com/fund/summary?t=RSP&region=usa&culture=en-US&ops=&cur=USD&productcode=COM

In first line, we see :

Basic Materials 4.91 3.38 3.69

Does it means that 4.91% of the total money of the fund is invested in Basic Material sector ? And the benchmark reference has only 3.38% of his total money invested in it ? And what the third column means?


1 Answer 1


You are correct about the first two questions. At the time it was last measured those were the percent invested in the Basic Materials sector for the ETF and its benchmark. Note, this ETF will be significantly different from its benchmark as it is an equal-weight index rather than the more common capitalization-weighted index. Meaning that this ETF could have materially different performance from its benchmark.

The third column is the average sector weights of all the ETFs in Morningstar's Large Blend category. These are ETFs that generally invest in a broad collection of large U.S. stocks and (weighted?) average of all of them will be generally fairly close to the benchmark.

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