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Does Morningstar cap sector weights in the index?

April 26, 2017cap index morningstar sector weights

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Does Morningstar cap sector weights in the index?

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We do not cap sector weights in the index. Traditionally, companies in a handful of sectorsFinancial and Utilitieshave dominated the dividend paying universe. By placing artificial caps on sectors, the makeup of the index may not be truly representative of the opportunity set. Also, when placing caps on sectors, the portfolio turnover increases significantly; an undesirable characteristic for an index fund.