While Everyone Owned the S&P 500, This Simpler ETF Was the Better Buy in Early 2026

For the past three years, owning the S&P 500 through a fund like the Vanguard S&P 500 ETF (NYSE:VOO) was the obvious choice as mega-cap technology companies drove the bulk of the index’s returns in 2023, 2024, and through most of 2025, rewarding investors who stayed concentrated in the largest names. 

As a result, the S&P 500 returned roughly 18% in 2025, while the Invesco S&P 500 Equal Weight ETF (NYSE:RSP) returned only roughly 11% over the same period. By all accounts, this ETF wasn’t the better trade over these past few years, but 2026 opened differently, and understanding why is the actual story here. 

What the Invesco S&P 500 Equal Weight ETF Is and How It Works

The Invesco S&P 500 Equal Weight ETF currently holds 508 total positions, roughly the same companies as the Vanguard S&P 500 ETF (which holds 518), but weights each one equally at around 0.2% of the portfolio. Companies like NVIDIA (NASDAQ:NVDA | NVDA Price Prediction), Apple (NASDAQ:AAPL), and Microsoft (NASDAQ:MSFT) get the same allocation as a mid-sized industrial company or a regional bank. 

In other words, no single stock can dominate, and no single sector can drive the whole fund. Of course, this structure has a cost as the ETF’s expense ratio is 0.20%, compared to Vanguard’s 0.03%. With roughly $90 billion in assets, the Invesco S&P 500 Equal Weight ETF is no niche holding, but the fee gap is real and worth acknowledging for long-term holders doing the math. 

Why the Invesco S&P 500 Equal Weight ETF Won In Early 2026

Through the first two months of 2026, the Invesco S&P 500 Equal Weight ETF outperformed the Vanguard S&P 500 ETF through early March. This matters a great deal for Vanguard, where tech represents roughly 33% of the entire portfolio. On the other hand, for the Invesco S&P 500 Equal Weight ETF, technology accounts for roughly 15% of its weight, industrials for around 15%, financials for 12%, and healthcare for roughly 11%. 

The bottom line is that when tech drags, Vanguard feels it in a way that the Invesco S&P 500 Equal Weight ETF structurally cannot. More importantly, about 8 of the 11 S&P 500 sectors were beating the cap-weighted index as of early March. This is exactly the kind of conditions where equal-weight historically outperforms. When gains are distributed across the market rather than concentrated in a handful of names, the Invesco S&P 500 Equal Weight ETF’s design becomes an advantage rather than a limitation. 

The Honest Caveat

To be fair, the six-point gap that opened in January and February has largely closed as markets pulled back broadly in March. This said, the outperformance was real, but it played out over a specific window, and the broader picture demands honesty. 

The Invesco S&P 500 Equal Weight ETF underperformed the S&P 500 between 2023 and 2025 on a full-year basis. The concentrated mega-cap tech leadership that defined those years is precisely what RSP’s structure filters out. When NVIDIA is up 200% and represents 4% of the Vanguard S&P 500 ETF’s holdings, equal weighting is a headwind. 

The Structural Argument for Owning Both

The early 2026 performance window illustrates something worth keeping in mind, regardless of what happens next: these two ETFs are not really competing products but rather different expressions of S&P 500 exposure with meaningfully different concentration profiles. 

An investor who owns only the Vanguard S&P 500 ETF is making a significant implicit bet on the continued dominance of mega-cap tech. The world saw this bet pay off pretty well between 2023 and 2025, but whether it continues to pay off depends entirely on whether the same handful of companies keep driving the market. This is a tough assumption going into an environment where tech is under pressure and valuations in that sector remain elevated. 

The Invesco S&P 500 Equal Weight ETF  doesn’t require you to forecast which sectors will lead, but it spreads the bet across all 500 companies equally and benefits when market participation broadens, something that Vanguard, by design, does not provide. 

For investors who are comfortable with the Vanguard S&P 500 ETF as their core S&P 500 holding, adding the Invesco S&P 500 Equal Weight ETF as a complement reduces exposure to mega-cap tech without abandoning the index entirely. Early 2026 showed what that trade-off looks like when the market shifts. Whether the shift continues is a separate question, but knowing the tool exists and understanding when it works is worth more than headline returns alone.