Equal-Weight S&P 500 ETF Lagged Over Five Years but Topped Its Rival Recently
A $300,000 investment in RSP grew to $447,060 over five years, while the same amount in IVV reached $542,220, a gap of $95,160. Over the most recent year, RSP returned 15.77% versus IVV's 15.04%, and it also led year-to-date. The comparison uses dividend-adjusted returns over identical periods.
The comparison tracked $300,000 in RSP and IVV from Oct. 22, 2021, through Oct. 22, 2026, counting dividends for both. RSP ended at $447,060, a 49.02% gain, while IVV reached $542,220, an 80.74% gain—a $95,160 difference.
Equal weighting periodically resets each holding to the same target share, reducing mega-cap concentration and raising smaller constituents’ weight. That structure often trails when a few giants lead and can lead when the broader group outperforms. The article notes it did not examine what caused the recent shift.
The divergence may affect individual investors and retirees who use S&P 500 ETFs for long-term savings, because short-term performance comparisons could encourage switching strategies after losses or gains. Financial advisers may face more questions about equal-weight versus cap-weighted exposure. However, both funds remain broad U.S. equity vehicles, so outcomes could depend more on time horizon and discipline than on a single year’s result.