Why ‘equal weight’ S&P 500 funds are having a moment—and are up almost 16% this year alone

S&P 500 index funds that utilize equal weighting are gaining popularity and have outperformed market benchmarks this year. The Invesco S&P 500 Equal Weight ETF (RSP) has gained 15.95% year to date, surpassing the iShares Core S&P 500 ETF (IVV) which has gained 12.37%. This almost 3.58 percentage-point gap has drawn attention back to equal weighting.

The ETF's assets under management reached $100 billion for the first time on Aug. 19, driven by a $12 billion influx of net inflows in 2026 alone. RSP assigns equal weight to each of the 500 companies in the index, making it less susceptible to the performance of individual giants compared to a market-cap-weighted fund. This approach helps RSP avoid underperformance from large tech stocks like Microsoft, Nvidia, and Apple, while capitalizing on the strong performance of smaller S&P 500 stocks.

The trade has not become too popular, according to Morningstar's senior associate manager research analyst, Brendan McCann. However, liquidity in RSP's smallest holdings may become a potential stress point as the fund's size grows. The performance gap also highlights the concentration of the S&P 500's returns on a few large tech stocks.

With tech dominating the index, RSP, which holds about 17% in technology, is expected to perform better than the broader market if tech stocks rebound.