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Roger Nusbaum submits: First Trust just listed two seemingly obscure ETFs based on broad-based Nasdaq indexes. One ETF is the Nasdaq 100 Equal Weight Fund (NASDAQ:QQEW) and the other is the Nasdaq 100 Technology Fund (NASDAQ:QTEC). QTEC is also equal weighted.

It seems like a lot of people think equal weighting is better because the Rydex S&P 500 Equal Weight ETF (NYSEARCA:RSP) has trounced the S&P 500 index over the last few years. I think 'RSP is better' is the wrong way to look at it.

RSP has outperformed because it tilts to smaller cap, and small cap has done much better than larger cap. Exxon (NYSE:XOM), General Electric (NYSE:GE) and Microsoft (NASDAQ:MSFT) have been far from market leaders, in terms of performance, but the three make up 8.35% of iShares S&P 500 (NYSEARCA:IVV). Those same three companies combine to make up 0.60% of RSP. Any wonder RSP has outperformed?

At some point mega caps will rotate back into favor. Eventually everything rotates back into favor even if it seems like it won't.

As long as Microsoft, Intel, Cisco and Dell lag, it is a good bet that QQEW and QTEC will outperform QQQQ.

That does not mean QQEW and QTEC are better. They favor different things so it is only logical that they would have periods of leading and lagging the cap-weighted index.