A motivation for replacing an equal weighting methodology with a Multi-Factor strategy.

Equal weighting is a widely accepted portfolio construction technique. The primary goal of equal weighting is to reduce exposure in your portfolio to any individual company thereby minimizing company specific risk and maximizing share diversification. An equally weighted portfolio has a role to play when addressing concentration risk and, if one considers how concentrated our local market is, one could argue that there is an even greater case for equal weighted portfolios in South Africa.

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