Invesco PowerShares Capital Management LLC today had a coming out party for the PowerShares Russell 1000 Equal Weight Portfolio (EQAL) exchange-traded fund, a product that actually began trading on December 23.

The fund, which tracks the Russell 1000 Equal Weight Index, joins PowerShares’ existing roster of alternatively weighted, or so-called smart-beta ETFs that includes 64 equity products and nine fixed-income offerings. Smart beta-type products are a broad category based on indexes that aren’t market capitalization-weighted.

Equal-weighting is the simplest form of smart-beta. The Russell 1000 Equal Weight Index first equal-weights each of the nine sectors within the index, and then equal weights the constituents in each sector. After every quarterly rebalancing, each sector represents 11 percent of the index, plus change. Or, to put it another way, the top three sectors––or any three sectors for that matter––add up to 33 percent of the portfolio.

Ken O’Keeffe, managing director of investable products at Russell Investments, says market cap-weighting the Russell 1000 leads to the top three sectors comprising 48 percent of the index. And equal-weighting the Russell 1000 by its constituents––and not first equal-weighting the sectors––leads to the top three sectors representing 52 percent of the index.

O’Keeffe says the methodology behind the Russell 1000 Equal Weight Index provides investors with greater diversification.

Along with increased diversification within the index, equal-weighting by sectors potentially might generate excess returns, too. According to Russell Investments, over the 10-year period ending December 31 the average annualized returns on the Russell 1000 Equal Weight index was 11.31 percent versus annualized gains of 7.96 percent for the Russell 1000 index.

But as the old saw cautions, past returns don’t guarantee future results. And some folks question whether the outperformance shown by the equal-weighted methodology––whether based on individual constituents or sectors––is driven by higher exposure to the small-cap factor and thus is simply a result of taking greater risk.

Nonetheless, equal-weighting is gaining popularity. So much, in fact, that the  PowerShares EQAL fund is the second product on the market that tracks the Russell 1000 Equal Weight Index. That other fund, the Guggenheim Russell 1000 Equal Weight ETF (EWRI), began trading in December 2010 and has accumulated nearly $50 million in assets while generating more than 15 percent average annualized returns since inception, according to Scottrade.

The difference between the funds mainly boils down to price––the Guggenheim fund’s expense ratio of 40 basis points is double that of the PowerShares fund.

And, on the surface, there’s also a difference in how the two funds report their sector allocations.

The Guggenheim offering comprises nine sectors that, as of Friday, were weighted between 10.69 percent and 11.56 percent of the portfolio. On the other hand, sector weights in the PowerShares fund ranged from 9.15 percent to 12.89 percent, and that didn’t include a tenth sector for telecommunications services.

O’Keeffe noted that telecom services is folded into the utilities sector within Russell’s classification system.

“It’s really the difference in the classification system,” John Feyerer, vice president of ETF product management at InvescoPowerShares, said about the seeming discrepancies. He notes PowerShares uses the Global Industry Classification Standard, or GICS, a commonly used system developed by Standard & Poor’s and MSCI. So while the EQAL fund replicates the Russell index that’s based upon nine global sectors, its sector allocations are displayed slightly different on the PowerShares website because it reports all of its funds using the GICS methodology.

“My guess on what’s happening is there are some subtle differences at the subsector or industry classification levels where there are some small differences in terms of how they’re categorized between the GICS and Russell systems,” Feyerer says.

He adds that despite those seeming differences, the bottom line is that the EQAL fund is replicating Russell’s sector-based equal-weighting methodology.

At the granular level of individual holdings, both the PowerShares and Guggenheim funds essentially mirror each other in terms of top 10 holdings, give or take an exception or two based on slight differences in portfolio weighting.

As for the one-month delay between EQAL’s inception and today’s official introduction to the world, Feyerer explains that InvescoPowerShares wanted to launch the fund by year-end so it could have a full-year track record starting with 2015 rather than waiting until 2016. But launching it two days before Christmas is a surefire way to get lost in the shuffle, so it waited until early this year before formally getting the word out and promoting the fund.

After its first month of trading, the PowerShares ETF has about $2.5 million in assets.

For its part, Guggenheim wouldn’t comment directly about the new PowerShares fund. “Guggenheim pioneered the equal-weight space, and we’re constantly looking for ways to enhance our ETF product line for the benefit of advisors and investors,” says company spokesman Ivy McLemore.