Invesco’s S&P 500 equal weight ETF is seeing record inflows in 2023.
The Invesco S&P 500 Equal Weight ETF (RSP ) has accreted $9.3 billion in net flows year to date as of December 4. The fund saw $2 billion in net flows last month alone.
“Investors have been positioning for an equity market that is not top heavy, dominated by a handful of stocks,” said Todd Rosenbluth, head of research at VettaFi. “Over the long term, an equal-weighted approach has performed well relative to a market-cap-weighted one.”
To maintain an equal-weighted portfolio, RSP sells relative winners and buys relative losers. This means the ETF will generally do well when small size and value factors are doing well.
This tends to be during periods of accelerating economic growth and falling risk — either falling equity volatility or falling credit spreads, according to Nick Kalivas, head of factor and core equity product strategy at Invesco.
Generally, when the market is recovering, Invesco’s S&P 500 equal-weight ETF will rise even more quickly. Additionally, equal weight has also historically outperformed in periods of compressed growth valuations. This was observed last year, as well as in the early 2000s.
How Flows Into RSP Compare to Past Years
RSP is on track to exceed $10 billion in net flows in 2023, which would mark a record-flow year for the fund. Invesco’s S&P 500 equal-weight ETF has $44 billion in assets under management, making it the largest equal-weight ETF available to investors.
Launched in 2003, RSP has seen a significant uptick in attention among the investor community in the past few years. The fund took in $5.2 billion last year after seeing $7.8 billion in flows in 2021. In 2020, RSP accreted $684 million in flows, and in 2019, just $49 million.
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