What’s behind the outperformance? RSP has exposure to some of the small-cap companies within the S&P 500, which are believed to be more flexible and nimble during a recovery from a recession. So the smaller-cap companies are weighted just the same as some of the heavyweights, giving equal exposure to companies of all sizes. [Equal Weight vs. Revenue Weight.]
Equal weight is generally said to outperform over time, while a cap-weighted approach tends to do well in specific market conditions.
For more stories about RSP, visit our RSP category.
Tisha Guerrero contributed to this article.
Read the disclaimer; Tom Lydon is a board member of Rydex|SGI.