Traders celebrating at the New York Stock Exchange on April 15, 2026, as the S&P 500 closed above the 7,000 level for the first time.
NYSE
Equal-weight ETFs are having a moment. The investing approach isn’t new, but it has moved into the spotlight this year as many of the large-cap stocks that have driven a disproportionate share of core stock market index performance in recent years have lagged. Allocating to equal-weight ETFs — which give every company in the underlying index the same share, rather than market-weight ETFs that mirror the core index itself — enables investors to maintain exposure to the market while addressing concerns around concentration risk.
The Invesco S&P 500 Equal Weight ETF (RSP), the oldest, largest, and most popular ETF using this approach, leads a fairly small pack of roughly 30 equal-weight ETFs that invest across broad market indexes and more narrowly defined sectors. It has attracted more than $12 billion this year, driving assets under management over $100 billion for the first time as it has edged out the market-weighted S&P 500 in performance year-to-date, by roughly 3% through August 21.
“All of a sudden, people are paying attention,” said Cinthia Murphy, director of research at VettaFi, noting the equal-weight strategy can be forgotten when the market is led by a very narrow theme, as it had been in recent years when the Magnificent 7 were posting outsized returns.
The Mag 7 — a group of mega-cap U.S. technology and growth companies that comprises Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia, and Tesla — collectively make up roughly one-third of the S&P 500. As a block, these companies dominated the U.S. market for years. More recently, however, the group has cooled off as heavy AI-related capital spending has weighed on investor sentiment. The Mag 7 posted flat performance in the first half of 2026, compared to gains of 9.3% for the S&P 500.
Performance of the Equal-Weight S&P 500 Index as measured by the RSP ETF vs. the Market-Weight S&P 500 Index as measured by the IVV ETF in 2026.
“Investors have grown increasingly concerned about the concentration risk embedded in major indices such as the S&P 500, where the top 10 names account for nearly 40% of the index. This exposure is particularly concentrated in the AI theme and the major hyperscalers, where investors are raising questions about elevated valuations and whether the heavy capital spending will ultimately be justified,” said Nathan Geraci, president of NovaDius. “At the same time, market performance has broadened beyond the mega-cap names, with a wider range of sectors and market segments participating in the rally. … Equal weighting solves the problem of concentration risk and allows investors to participate more fully if market leadership continues to broaden,” he added.
RSP and its peers still have a long way to go to catch up to the mega S&P 500 funds. The three biggest ETFs of all — Vanguard S&P 500 ETF (VOO), iShares Core S&P 500 ETF (IVV) and State Street SPDR S&P 500 Trust (SPY) — have close to $3 trillion in assets between them, led by VOO’s roughly $1 trillion.
But more investors are turning to equal-weight and smart-beta strategies, using them as both a short-term trade to capitalize on the shift and as a long-term way to stay diversified and invested in the broader market, Murphy said. “The market has been talking about the need to diversify from the Mag 7 for years, and we’re actually seeing that playbook work. It’s not all about the Mag 7. Other stocks are catching up, earnings growth is strong in the other 493 [of the S&P 500 Index], projections for earnings for the other 493 are strong. This is supportive for equal weighting,” she said. “If you’re equal weighted, you’re always broadly diversified. You’re not really picking a winning horse; you’re betting on all the horses.”
Both Geraci and Murphy said that while RSP has gained a lot of the attention, there are more options in the equal-weight ETFs bucket that track indexes other than the S&P and specific sectors.
Geraci noted there are enough options available to appeal to an investor’s specific wants and needs. For instance, he said, the Invesco Russell 1000 Equal Weight ETF (EQAL) is similar to RPS but tracks a different index, the First Trust Nasdaq-100 Select Equal Weight ETF (QQEW) concentrates on companies in the index with high combined quality and growth scores, the ProShares S&P 500 Dividend Aristocrats ETF (NOBL) tracks companies in the index that have consistently increased dividends each year for at least 25 years, the iShares MSCI USA Equal Weighted ETF (EUSA) focuses on large- and mid-caps in the underlying MSCI index, the ALPS Equal Sector Weight ETF (EQL) tracks U.S. large-cap equities by allocating equal weight across economic sectors, while maintaining float-adjusted market capitalization weighting within each sector.
Murphy pointed to the Invesco S&P 500 Equal Weight Technology ETF (RSPT), which equal weights technology companies in the underlying index; the ALPS Equal Sector Weight ETF
Invesco QQQ Equal Weight ETF (QEW), which concentrates on U.S. large caps across all 11 Global Industry Classification Standard economic sectors; the SPDR S&P Biotech ETF (XBI), which tracks an equal-weighted index of U.S. biotechnology stocks; and the Invesco S&P 500 Equal Weight Materials ETF, which holds U.S. materials and natural resource-related companies from the S&P 500.
“Investors concerned about the top-heavy composition of major indices are looking for alternative ways to gain exposure, and equal-weighted ETFs offer an obvious solution,” Geraci said. But he also added another option altogether: “Historically, the equal-weighted S&P 500 index has performed very similarly to mid-caps. One could argue that investors should simply increase their exposure to this category, as lower-cost options are available.”
