An investor who placed $300,000 into the Invesco S&P 500 Equal Weight ETF (RSP) in October 2021 finished $95,160 behind the same amount in the iShares Core S&P 500 ETF (IVV) by October 2026. The five-year gap highlights a key trade-off in equal-weight investing: it trailed significantly over the long term but outperformed the market benchmark over the most recent year.
According to The ETF Examiner, RSP grew the initial $300,000 to $447,060 over the five-year period ending October 22, 2026. This represents a total return of 49.02%. In contrast, IVV, which tracks the S&P 500 by market capitalization, grew the same amount to $542,220, a return of 80.74%. The difference between the two final values is $95,160.
The performance picture reverses when the timeframe is shortened to one year. Over the 12 months ending October 22, 2026, RSP returned 15.77%, while IVV returned 15.04%. Year to date through that same date, RSP was up 14.84% compared to IVV's 12.88%. Editor Ryne Mauck notes that these figures are calculated on a dividend-adjusted basis, meaning distributions are included for both funds to provide an accurate comparison.
The structural difference between the funds drives these varying results. RSP uses equal weighting, which resets every company in the index to the same share at each rebalance. This design reduces the influence of the largest companies and increases the weight of smaller firms. IVV uses market-cap weighting, where larger companies hold a proportionally larger share of the fund.
Mauck explains that equal-weight funds tend to lag when a small number of large companies drive market gains. They tend to lead when average companies outperform those giants. The five-year deficit for RSP reflects a period where large-cap dominance was prevalent. However, the recent one-year outperformance shows that the design can shift relative to the benchmark depending on market conditions.
The article cautions against judging either fund based solely on recent performance. The $95,160 five-year gap already includes the past year's outperformance by RSP. Mauck argues that switching funds based on short-term windows can lead to poor timing decisions. Investors who sold RSP after five years of lagging may have exited just as it began to outperform. Conversely, buying after a single good year risks entering a period of underperformance.
The choice between equal-weight and cap-weighted funds comes down to an investor's tolerance for concentration. Cap-weighted funds like IVV align returns with the largest companies in the index. Equal-weight funds like RSP spread risk more evenly but often trail during periods of large-cap leadership. Mauck advises investors to choose their weighting strategy deliberately and maintain it through full market cycles rather than reacting to annual performance shifts.