Two Ways to Own the S&P 500
SPY is the classic cap-weighted S&P 500 fund. The bigger a company’s market value, the larger its weight, so Apple sits near 7% of the fund and the Magnificent Seven together make up roughly 34%. RSP, the Invesco S&P 500 Equal Weight ETF, flattens that out. Every one of the 505 holdings gets about 0.20%, and the fund rebalances to equal weight each quarter.
Why the Gap Is Showing Up in 2026
The difference stops being academic when the biggest names stumble. Through August 12, 2026, RSP is up 13.9% year to date versus 11.6% for the S&P 500. Tesla has fallen about 28% and Meta about 10% this year, and because those stocks are tiny slices of RSP, the equal-weight fund absorbed the damage better than a cap-weighted one. RSP also pays a 1.49% dividend yield on top of a 0.20% expense ratio, with around $99.18 billion in assets.
What the Comparison Misses
Equal weight is not automatically better. It is a bet that the smaller 493 companies, the “Forgotten 493,” keep up with the giants, and it tends to lag when a handful of mega-caps lead the market higher. It also means more turnover and a mild tilt toward mid-sized stocks inside the S&P 500.
This is the core of Larry Benedict’s Project 2026 thesis, which argues trade policy will push money out of the biggest names and into the rest of the index. For the full concentration argument, read our S&P 500 concentration risk explainer. For more on how the two indexes diverge over full cycles, see our equal weight versus cap weight guide. The same “too few stocks doing all the work” theme shows up in our AI market crash coverage.
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