In global equity markets, the S&P500 stands as a preeminent benchmark reflecting the performance of leading US equities. It employs a float adjusted market capitalization approach, which assigns greater influence to companies with a higher free float market valuation. In other words, the index is sensitive to where most of the market's value is concentrated. If the largest companies which hold the majority of market value are doing well, the index is likely to go up. While this is the general idea behind market cap weighted indexes, this method is not without its limitations. A market cap weighted index can become skewed by its largest constituents. When a handful of high valuation companies experience significant price changes, they can disproportionately affect the index's trajectory, potentially obscuring the movements of smaller companies and by extension, the broader market sentiment. On the chart, you can see the 2023 performance of the free float market cap weighted S&P 500 index and the S&P 500 equal weight index. In the latter, each index constituent is accorded the same weight. This egalitarian approach democratizes the influence of each company, irrespective of its market capitalization, providing a different perspective on market performance. As you can see in 2023, there was a significant disparity in performance of these two indexes. While the market cap weighted index gained around 23% over the observed period, the upward trajectory was not universally shared across the board and the equal weighted index underperformed significantly. In fact, most of the upward momentum was attributed to several prominent companies whose substantial market capitalizations have exerted considerable influence on the index's elevation and overshadowed the broader market's performance.