Forget SPY: Invesco’s Fund Gives the Smallest S&P 500 Company the Same Say as the Largest
SPY hands most of your money to a handful of giants, but one rival fund treats the smallest S&P 500 company as an equal to the largest. The tradeoff is stranger than it sounds, and the recent returns reveal a…
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Owning the SPDR S&P 500 ETF (NYSEARCA:SPY) means every dollar you invest follows company size. SPY holds the S&P 500 by market capitalization, so the biggest companies get the biggest slices and drive most of what the fund does. Investors buy SPY for sound reasons: it is cheap, deeply liquid, and delivers large-cap America in one ticker. The Invesco S&P 500 Equal Weight ETF (NYSEARCA:RSP) owns the same index members but changes one rule. At each rebalance, the smallest company in the benchmark carries the same weight as the largest. The companies stay the same, but the portfolio you end up owning looks very different.
How Much of Your Index Fund Rides on a Few Names
SPY’s fact sheet dated March 17, 2026 shows NVIDIA (NASDAQ:NVDA | NVDA Price Prediction) at 7.58% of the fund, Apple (NASDAQ:AAPL) at 6.66%, and Microsoft (NASDAQ:MSFT) at 4.91%. Amazon, Alphabet, Broadcom, Meta, and Tesla fill out most of the rest of the top 10, with Alphabet appearing twice through two share classes.
For a SPY holder, that means one bad quarter at NVIDIA can move your account more than dozens of smaller holdings combined. You carry a heavy dose of big technology whether or not you ever chose it. Equal weighting by design refuses that concentration. The question here is which risk you want to carry: a portfolio tied to a handful of giants, or one spread evenly across the whole benchmark.
A One-Month Split That Signals a Narrowing Market
The difference is live right now. Through the most recent market close on September 25, 2026, SPY rose 0.69% over the past month while RSP fell 4.6%. Over the past week, SPY gained 1.27% and RSP slipped 0.18%.
That gap runs against equal weighting. It shows the market narrowing toward its very largest members: the giants kept climbing while the typical S&P 500 company lost ground. An equal-weight holder feels that weakness directly, because the typical company is exactly what RSP owns. Riding a market this top-heavy is fine as long as you have thought through the exit, which is the whole point of our free bubble survivor’s handbook.
Equal Weight Has Trailed Over Every Window Measured
RSP has fell behind SPY across every period in the data, through the September 25, 2026 close:
| Period | SPY | RSP |
|---|---|---|
| Past week | 1.27% | -0.18% |
| Past month | 0.69% | -4.6% |
| Year to date | 13.11% | 11.52% |
| One year | 17.22% | 14.86% |
| Five years | 73.76% | 49.14% |
| Ten years | 257.82% | 201.7% |
One warning matters. SPY’s figures use unadjusted prices, while RSP’s use adjusted prices that fold in reinvested distributions. The comparison is therefore approximate, so read the gap as directional rather than exact. Because SPY’s numbers leave out its dividends, the mismatch tilts the table in RSP’s favor, and equal weighting still trails.
What You Pay for Balance
Equal weighting requires regular rebalancing: selling companies that have gained and buying ones that have fallen to restore equal slices. That creates trading, and the fee reflects the extra work. RSP’s prospectus dated June 10, 2026 lists a net expense ratio of 0.20%. SPY’s fact sheet dated March 17, 2026 lists 0.0945%. You pay the higher RSP fee every year you hold it, whether equal weighting is working or not.
Switching carries its own costs. Selling SPY shares that have appreciated for years can trigger capital gains taxes. Investors who want to shift can make the move inside an IRA or 401(k), where trades carry no immediate tax, or they can direct new contributions to RSP and leave existing SPY shares untouched. Holding both funds offers a middle path: you keep SPY’s exposure to the market leaders while reducing the concentration.
Who Should Move and Who Should Stay
If you are comfortable holding the market exactly as it is, concentration included, you have no reason to leave SPY. It costs less, and its structure has led over every period in the table.
If you are nervous about how much of your index fund now rides on NVIDIA, Apple, and Microsoft, RSP gives you a concrete way to spread that exposure evenly across the benchmark. Accept the terms going in: a higher fee, trading from rebalancing, and the chance of trailing for as long as the largest names keep leading, as they did again over the past month. A broadening rally, where the typical S&P 500 company outpaces the giants, would strengthen the case for equal weighting. Until then, RSP is a choice to carry a different risk, and you should consider it against your own goals, taxes, and time horizon.
Contact [email protected] for any questions or corrections.
Ryne Mauck is an investment writer covering exchange-traded funds, retirement planning, and portfolio strategy. Through his work at 24/7 Wall St. and other investment platforms, including Seeking Alpha, he aims to provide clear, research-driven insights that help investors make more informed decisions while maintaining a long-term approach to investing.
Ryne holds a B.Sc. in Finance and an M.A. in Political Science. He is a formerly registered Municipal Advisor Representative and has passed the Series 50, Series 63, and Series 65 exams. His articles are not intended to be, nor should they be interpreted as, financial advice.
