Why This Underrated S&P 500 ETF May Be the Best Way to Invest in the Index Right Now
Key Points
The Invesco S&P 500 Equal Weight ETF (RSP) gives roughly the same weighting to all S&P 500 companies.
As a result, the tech sector accounts for just 19% of the fund versus nearly 39% for the S&P 500.
RSP has underperformed the S&P 500 over the past 10 years, but has slightly outperformed it since inception.
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The S&P 500 is one of the most common and effective ways to invest in the stock market. It tracks around 500 of the largest American companies on the market and is the go-to for millions of investors who prefer a passive approach to investing.
Although the S&P 500 companies are fixed, there are various ways to invest in the index, including via an equal-weight ETF, such as the Invesco S&P 500 Equal Weight ETF (NYSEMKT: RSP). It's likely not where your mind goes when you think of the S&P 500, but it's an underrated way to invest in those same companies, especially in the current environment.
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RSP has less reliance on the tech sector
The standard S&P 500 is weighted by market capitalization, so larger companies make up a larger share of the index. Its top 10 holdings account for over 39% of the index, so as they go, so does it. Those same 10 companies, however, only account for 2% of RSP.
| Company | Percentage of S&P 500 | Percentage of RSP |
|---|---|---|
| Nvidia | 7.89% | 0.20% |
| Apple | 7.04% | 0.20% |
| Microsoft | 5.14% | 0.18% |
| Amazon | 4.06% | 0.19% |
| Alphabet (Class A) | 3.40% | 0.11% |
| Broadcom | 3.26% | 0.21% |
| Alphabet (Class C) | 2.71% | 0.09% |
| Meta Platforms | 2.13% | 0.19% |
| Tesla | 1.88% | 0.21% |
| Micron Technology | 1.68% | 0.27% |
Data sources: Vanguard and Invesco. Percentages are as of May 31, 2026.
There are slight variations in weightings, but RSP aims to do exactly what its name implies: give equal weight to each company within the S&P 500. This approach means RSP is way less tech-heavy, and the other 10 major sectors pull more of their own weight. Tech stocks account for 38.6% of the S&P 500 versus only 19% of RSP.
Right now, the tech sector is considerably expensive, increasing the risk of high volatility and a potential pullback. When the sector is booming, it works in the S&P 500's favor, but when it hits a rough patch, it can weigh considerably on the index. The latter is when RSP will shine more or stink it up less.
A good recent example of this is the 2022 bear market. During that time, many big-name tech stocks experienced huge slumps, including the "Magnificent Seven" stocks, which declined between 26% and 65% that year. This weighed down the S&P 500, and it dropped over 19%. RSP also finished the year in the negative, but the equal weight cushioned the blow a little, and it "only" finished down 13%.
RSP's surges may not be as explosive, but its plunges are oftentimes not as severe, either. That matters.
How RSP returns have compared to the S&P 500's returns
Over the past decade, the standard S&P 500 has outperformed the equal-weight index because of the growth of large tech stocks that have accounted for much of the S&P 500. Here is how the investments' annual averages compare across different numbers of years.
| Investment | YTD Returns | 3-Year Annual Average | 5-Year Annual Average | 10-Year Annual Average |
|---|---|---|---|---|
| RSP | 8.3% | 12.7% | 6.9% | 10% |
| S&P 500 | 7.4% | 18.9% | 11.6% | 13.4% |
Data source: YCharts. Returns as of June 23, 2026.
Although the past decade has decidedly belonged to the standard S&P 500, RSP has outperformed the index since its April 2003 inception. In that time, RSP is up 716% (9.5% annually) compared to the S&P 500's 703% (9.4% annually).
Past performance doesn't guarantee future performance -- and there's no way to predict how RSP or the S&P 500 will perform in the near term -- but RSP is capable of producing attractive returns without taking on the extra risk of the concentrated S&P 500. And although the companies are the same, the differences in weighting mean you can hold both RSP and an S&P 500 ETF without worrying too much about the overlap.
I wouldn't make RSP the bulk of my portfolio, as I would with an S&P 500 index fund, however.
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Stefon Walters has positions in Apple and Microsoft. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, Broadcom, Meta Platforms, Micron Technology, Microsoft, Nvidia, and Tesla. The Motley Fool has a disclosure policy.
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