The S&P 500 Equal Weight Index and the standard S&P 500 Index are two distinct approaches to tracking the performance of the U.S. large-cap equity market. While both indices comprise the same 500 constituents, their weighting methodologies differ significantly, leading to variations in performance. This article delves into a performance comparison between these two indices, leveraging data from Morningstar Research Inc. as of September 30, 2023.
Over a period spanning from January 9, 2003, to September 30, 2023, the S&P 500 Equal Weight Index demonstrated a tendency to outperform its market-cap weighted counterpart. Looking at rolling monthly periods, the equal weight index surpassed the standard S&P 500 Index in a majority of instances. Specifically, the S&P 500 Equal Weight Index outperformed the S&P 500 Index 52% of the time over the most recent 3-year and 5-year periods, and 60% of the time over the last 10-year period.
Analyzing annualized performance further highlights this trend. Since the inception of the S&P 500 Equal Weight Index on January 8, 2003, it has achieved an annualized performance of 10.48%, while the S&P 500 Index recorded 10.02%. Focusing on the period after the inception of the Invesco S&P 500 Equal Weight ETF (RSP) on April 24, 2003, through September 30, 2023, the fund continued to outpace the S&P 500 Index by 0.46% annually (10.48% vs 10.02% annualized return at NAV, respectively).
It’s crucial to remember that past performance is not indicative of future results. Index returns are for illustrative purposes and do not represent actual fund returns. For fund-specific performance data, investors should refer to fund prospectuses and disclosures. Investment returns and principal value can fluctuate, and the value of shares may be higher or lower than the original purchase price upon redemption. Current performance figures may also vary from the data presented, and the most up-to-date month-end performance numbers are available on financial websites.
