Two ETFs, One Index, Different Results

Both the Invesco S&P 500 Equal Weight ETF (RSP) and the SPDR S&P 500 ETF Trust (SPY) track the same benchmark: the S&P 500 Index.

However, the way each fund allocates capital creates significantly different investment outcomes.

SPY uses a market-cap-weighted structure, meaning the largest companies receive the biggest allocations. As a result, a small group of technology giants dominates the fund’s performance.

RSP follows an equal-weight methodology, assigning roughly the same allocation to every company in the index regardless of size. The fund rebalances quarterly to maintain that structure.

While both funds hold the same 500 companies, their risk and return profiles can differ considerably.

SPY Has Benefited From the AI Boom

The artificial intelligence revolution has heavily favored SPY’s structure.

Because companies such as Nvidia, Apple, Microsoft, Amazon, Alphabet, Meta Platforms, and Tesla make up a large percentage of the fund, SPY has captured the full benefit of the AI-driven rally.

The top ten holdings now represent nearly 40% of SPY’s assets, while the Magnificent Seven account for roughly one-third of the portfolio.

This concentration has rewarded investors over the last decade. SPY has delivered a total return of approximately 251% over the past ten years, outperforming RSP’s roughly 207% gain.

For investors who believe the largest technology companies will continue dominating earnings growth and market performance, SPY remains the more direct way to express that view.

RSP Benefits When More Stocks Participate

RSP is designed to benefit from broader market participation.

Instead of allowing winners to grow into oversized positions, the fund periodically trims outperformers and reallocates capital toward lagging stocks.

This approach naturally increases exposure to sectors such as industrials, financials, energy, materials, and other areas that receive smaller allocations within SPY.

The strategy has begun to show signs of strength in 2026.

As investors take profits in high-flying AI stocks and seek opportunities in other sectors, RSP has modestly outperformed SPY year-to-date.

The equal-weight structure allows investors to benefit when gains spread across the broader economy rather than remaining concentrated in a handful of mega-cap names.

Diversification Is the Key Difference

The biggest distinction between the two ETFs is concentration risk.

SPY’s performance is increasingly dependent on a small group of companies. If those firms continue posting strong earnings and maintaining their leadership positions, SPY is likely to remain the superior performer.

However, if technology valuations come under pressure or market leadership broadens, RSP may benefit from its more balanced exposure.

For investors who already own significant positions in technology-focused funds or individual AI stocks, RSP can provide additional diversification without abandoning exposure to the broader U.S. market.

Cost Considerations

SPY remains the less expensive option, with an expense ratio of 0.0945% compared with RSP’s 0.20%.

While the difference is relatively small, SPY’s lower turnover also tends to make it more tax-efficient over long periods.

RSP’s higher costs reflect the quarterly rebalancing process required to maintain equal weightings across all holdings.

The Bottom Line

SPY remains the preferred choice for investors who expect artificial intelligence leaders and mega-cap technology companies to continue driving stock market gains.

RSP may appeal to investors who believe the market is entering a new phase where performance becomes more broadly distributed across sectors and company sizes.

Neither approach is inherently better. Each reflects a different view of how the market will evolve.

As 2026 progresses, the battle between concentrated AI leadership and broader market participation may determine which ETF ultimately delivers superior returns.