ETFdb Logo
ETFdb Logo
  • ETF Database
  • Channels
    • Active ETF
    • Beyond Basic Beta
    • China Insights
    • Climate Insights
    • Commodities
    • Core Strategies
    • Crypto
    • Direct Indexing
    • Disruptive Technology
    • Energy Infrastructure
    • ETF Building Blocks
    • ETF Education
    • ETF Strategist
    • Financial Literacy
    • Fixed Income
    • Gold/Silver/Critical Minerals
    • Innovative ETFs
    • Institutional Income Strategies
    • Leveraged & Inverse
    • Managed Futures
    • Market Insights
    • Modern Alpha
    • Night Effect
    • Portfolio Strategies
    • Responsible Investing
    • Retirement Income
    • Richard Bernstein Advisors
    • Tax Efficient Income
    • Volatility Resource
  • Tools
    • ETF Screener
    • ETF Country Exposure Tool
    • ETF Sector Tracker Tool
    • ETF Database Categories
    • Head-To-Head ETF Comparison Tool
    • ETF Stock Exposure Tool
    • ETF Issuer Fund Flows
    • Indexes
    • Mutual Fund To ETF Converter
  • Research
    • ETF Education
    • Equity Investing
    • Dividend ETFs
    • Leveraged ETFs
    • Inverse ETFs
    • Index Education
    • Index Insights
    • Top ETF Sectors
    • Top ETF Issuers
    • Top ETF Industries
  • Webcasts
  • Themes
    • AI ETFs
    • Blockchain ETFs
    • See all Thematic Investing ETF themes
    • ESG Investing
    • Marijuana ETFs
  • Multimedia
    • ETF 360 Video Series
    • ETF of the Week Podcast
    • ETF Prime Podcast
    • Video
  • Company
    • About VettaFi
    • Get VettaFi’ed
  • PRO
    • Pro Content
    • Pro Tools
    • Advanced
    • FAQ
    • Pricing
    • Free Sign Up
    • Login
  1. Portfolio Strategies Channel
  2. Equal Weight Outperforms S&P 500 Increases
Portfolio Strategies Channel
Share

Equal Weight Outperforms S&P 500 Increases

Elle CarusoNov 15, 2022
2022-11-15

Even as the broader market rallies, the S&P 500 Equal Weight Index has continued to outperform its cap-weighted parent index by a sizable — and increasing — margin.  

Equal weight’s underweight of mega-cap growth companies has been a key contributor to the index’s outperformance this year, as these companies have been particularly sensitive to rising interest rates, persistent high inflation, and a strong U.S. dollar. 

Year-to-date through November 15, the S&P 500 has declined by 16.8% while the Invesco S&P 500 Equal Weight ETF (RSP B+), which tracks the S&P 500 EWI, has declined by 10.9%, according to YCharts. 

Equal Weight Outperforms S&P 500 Increases

The spread between the indexes’ returns has increased following disappointing Q3 earnings from big tech companies; less than a month ago, year-to-date through October 20, the S&P 500 was down 22.1% while equal weight had declined 18% during the same period.  

The portfolio overlap between the two indexes, as measured by the percentage of index weights held in common, is 52% as of October 31, according to S&P Dow Jones Indices.  

Equal weight’s factor tilts towards small size and value have helped it outperform the benchmark this year. As of September 30, the S&P 500 Equal Weight has a tilt towards small size (47.8%), value (33.4%), and dividend (15.6%) compared to the S&P 500. It also has a tilt away from quality (-23.7%), low volatility (-6.0%), high beta (-4.5%), and momentum (-3.1%), according to S&P Dow Jones Indices. 

As of the end of October, equal weight has outperformed the S&P 500 by 5% over a 12-month period. The S&P 500 EWI slightly outperformed the S&P 500 during the third quarter of 2022, while equal weight outperformed the S&P 500 by 2% in both the first and second quarters of 2022.  

Equal weight strategies can provide diversification benefits and reduce concentration risk by limiting the impact that an individual security’s movements can have on the overall fund. 

For more news, information, and strategy, visit our Portfolio Strategies Channel.


Content continues below advertisement

Loading Articles...
Our Sites
  • VettaFi
  • Advisor Perspectives
  • ETF Trends
Tools
  • ETF Screener
  • Mutual Fund to ETF Converter
  • Head-To-Head ETF Comparison
  • ETF Country Exposure Tool
  • ETF Stock Exposure Tool
  • ETF Database Pro
More Tools
  • Financial Advisor & RIA Center
Explore ETFs
  • ETF News
  • ETF Category Reports
  • Premium Articles
  • Alphabetical Listing of ETFs
  • Browse ETFs by ETF Database Category
  • Browse ETFs by Index
  • Browse ETFs by Issuer
  • Compare ETFs
Information
  • Contact Us
  • Terms of Use and Privacy Policy
  • © 2023 VettaFi LLC. All rights reserved.

Advertisement

Is Your Portfolio Positioned With Enough Global Exposure?

ETF Education Channel

How to Allocate Commodities in Portfolios

Tom LydonApr 26, 2022
2022-04-26

A long-running debate in asset allocation circles is how much of a portfolio an investor should...

Core Strategies Channel

Why ETFs Experience Limit Up/Down Protections

Karrie GordonMay 13, 2022
2022-05-13

In a digital age where information moves in milliseconds and millions of participants can transact...

}
X