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Instead of making a beeline to the SPDR S&P 500 ETF (NYSEARCA:SPY) as the default exchange traded fund for S&P 500 index exposure, investors can also consider an outperforming equal-weight approach.

The Guggenheim S&P 500 Equal-Weight ETF (NYSEARCA:RSP) has gained an average annualized 9.6% over the past ten years, compared to the 7.4% return for SPY. Year-to-date, RSP is up 24.6% while SPY increased 20.8%.

The equal-weight methodology provides investors with performance potential, diversification and a disciplined rebalancing schedule; Bill Belden, Managing Director and Head of Product Development at Guggenheim Investments, said in a note.

The equal-weight methodology is outperforming its market-cap-weighted ETF rivals this year, thanks to the outperformance of smaller stocks, and mid-caps in particular.

"Since inception, Guggenheim S&P 500 Equal Weight has outpaced the market-weighted S&P 500. Equal-weighting's primary advantage compared with market-cap weighting comes from its greater exposure to higher-risk but higher-return small-cap stocks," says Morningstar analyst Michael Rawson in a report on RSP.

By equally weighting component holdings, RSP diminishes concentration risk and provides a more balanced exposure across sectors.

Additionally, the Guggenheim ETF rebalances on a quarterly basis to maintain its equal-weight strategy.

The outperformance has helped RSP attract $1.3 billion in new assets so far this year, according to IndexUniverse. In August, while U.S. equity ETFs saw $13.6 billion in outflows, the Guggenheim ETF hit a new record for assets under management and sits over the $5 billion AUM level.

Max Chen contributed to this article.

Full disclosure: Tom Lydon's clients own SPY and RSP.

Disclosure: I am long RSP, SPY. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

Additional disclosure: Mr. Lydon serves as an independent trustee of certain mutual funds and ETFs that are managed by Guggenheim Investments; however, any opinions or forecasts expressed herein are solely those of Mr. Lydon and not those of Guggenheim Funds, Guggenheim Investments, Guggenheim Specialized Products, LLC or any of their affiliates.