When combining two investment portfolios with high Sharpe Ratios, would the resulting portfolio also have a high Sharpe Ratio? How about combining two investment strategies with high information ratios relative to S&P500 benchmark? Would the resulting portfolio have a higher IR? Please use examples or derive carefully your explanation. A market-cap weighted index is considered the most representative of market conditions, especially when it is adjusted for free float. Some practitioners, however, have suggested moving away from this weighting scheme to one based on fundamentals such as sales, cash flow, dividends, etc. Why doing so might outperform market-cap weighted index?