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An increasing number of analysts are recommending investors switch from a market capitalization-weighted index like the SPX to an equal-weighted index ETF like the Invesco S&P 500 Equal Weight ETF. Besides providing a more balanced equity exposure across major industries, RSP has also outperformed the SPX by a meaningful margin since the fund's inception in 2003 (~24 years). Allocating to the RSP instead of the SPX addresses the problem of concentrating on the hottest themes.
Sign of top or next pop? Rush of new offerings spring up around Mag 7, weight loss.
The Invesco S&P 500 Equal Weight ETF (RSP) was launched on 04/24/2003, and is a passively managed exchange traded fund designed to offer broad exposure to the Large Cap Blend segment of the US equity market.
Making its debut on 04/24/2003, smart beta exchange traded fund Invesco S&P 500 Equal Weight ETF (RSP) provides investors broad exposure to the Style Box - Large Cap Blend category of the market.
RSP solves diversification issues with the S&P 500 Index by equal weighting its constituents. Total returns since May 2003 are excellent, though the ETF has lagged over the last decade. Investors looking to lower Magnificent Seven exposure might turn to RSP. However, the way the Index is structured means that approach sacrifices substantial quality and growth. This article breaks down numerous profitability metrics for the S&P 500 Index's top sub-industries, demonstrating how RSP's composition is not favorable.
The article evaluates the Invesco S&P 500 Equal Weight ETF as an investment option at its current market price. RSP has under-performed the market-cap version of the S&P 500, but I believe this builds on the case for buying/owning this product given how concentrated market-cap S&P 500 ETFs have become. The performance gap between RSP and the S&P 500 has become extreme, signaling a reversion to the mean is likely to happen.
Big Tech's market dominance may push more investors to equal-weight ETFs, according to VettaFi's Todd Rosenbluth.
After a big year-end rally, the stock market is attempting to consolidate gains in January. That consolidation has several stock indices and ETFs trading near recent price highs.
After one of the weirdest bull-market runs in recent memory, that investors have a lot of questions heading into 2024 should not be surprising.
December has seen continued momentum in the equity market due to anticipation of rate cuts in the coming year. The Dow Jones Industrial Average and Invesco S&P 500 Equal Weight ETF have shown strong results, reflecting broader participation is finally happening. Expensive growth stocks like Microsoft and Mastercard may still be worthwhile investments for long-term investors that also provide significant dividend growth.