Not quite. One reason why many passive indices are market-cap weighted is so they do not have to regularly trade. Suppose a fund needs to be 1% AMZN. Now you fi

Not quite. One reason why many passive indices are market-cap weighted is so they do not have to regularly trade. Suppose a fund needs to be 1% AMZN. Now you fire up a hype train and the price of AMZN doubles. It now represents twice as much of the index, market-cap weighted, so the fund wants to be 2% into AMZN, but their stake has doubled with the price so there’s no trading needed! That said, you can generally pick up an extra point or two of returns by equally weighting and trading against the daily volatility, and some funds do this, but they cannot scale up to have as large capacity.