Why don't more investors use the equal-weighted index

 

I am surprised that more investors don't use the equal-weighted index. We know that a cap-weighted index is a closet momentum index. We know that a cap weighted will place excessive weight on the top performing names, yet there is a still this core bias. Investors may be stuck in their old ways, yet if we look at the equal-weighted performance it shows good performance versus many of the alternatives. There are rebalancing costs, yet it does diversify risks. Clearly, we know that an equal weighted avoids many of the issues with portfolio optimization, so this simple portfolio may be an effective way to max diversification and avoid any concentration bias.