Alexey_Arz
Some investors are drawn to the Invesco S&P 500 Equal Weight ETF (NYSEARCA:RSP) because it provides a balanced approach to investing in the S&P 500 rather than having a fund that is market cap weighted. This can reduce
RSP: Why The Equal Weight S&P 500 Index Fund Doesn't Make Sense For Long-Term Investors
Summary
- RSP offers balanced S&P 500 exposure, reducing concentration risk but sacrificing upside from mega-cap growth, especially in tech-heavy rallies.
- Over the past five years, RSP has underperformed SPY by 22%, and I expect this trend to persist given current market dynamics.
- Equal weighting increases exposure to smaller, more volatile companies, and does not sufficiently mitigate downside risk compared to market-cap-weighted funds.
- Given RSP’s consistent underperformance and limited risk mitigation, I am not allocating capital to it and prefer traditional S&P 500 index funds.
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