Is Equal-Weighting the S&P 500 Worth It? Here's What the Data Says

The article compares the SPDR S&P 500 ETF Trust (SPY) with the Invesco S&P 500 Equal Weight ETF (RSP) and argues that equal weighting has not delivered a superior long-term payoff. While RSP reduces concentration in mega-cap technology stocks and boosts exposure to sectors like industrials, financials, and utilities, it also lowers tech exposure materially and increases turnover and costs. Over the past 23 years, SPY slightly outperformed RSP on total return, while also posting lower volatility and better risk-adjusted performance. The piece concludes that equal weighting may be useful for investors seeking to reduce concentration risk or improve behavioral discipline, but it is harder to justify on performance and cost grounds alone.