Guggenheim S&P 500 Equal Weight (NYSEArca: RSP) now boasts a decade-long track record that tops the S&P 500.
RSP is also outperforming its market-cap-weighted ETF rivals this year thanks to the outperformance of smaller stocks, and mid-caps in particular.
Investors are noticing as RSP on Monday saw $250 million worth of trading in what appears to be a buyer, according to ETF liquidity provider WallachBeth Capital.
The ETF invests 0.2% in every stock in the S&P 500, and rebalances on a quarterly basis to maintain the equal weighting.
Market-cap-weighted funds such as SPDR S&P 500 (NYSEArca: SPY) weight stocks by their size. For example, Apple (NasdaqGS: AAPL) and Exxon Mobil (NYSE: XOM) are the largest two stocks in SPY at nearly 3% each.
RSP has delivered a total return of 24.5% year to date, compared with 20.9% for the S&P 500, according to Morningstar performance data.
“Since inception, Guggenheim S&P 500 Equal Weight has outpaced the market-weighted S&P 500. Equal-weighting’s primary advantage compared with market-cap weighting comes from its greater exposure to higher-risk but higher-return small-cap stocks,” says Morningstar analyst Michael Rawson in a report on RSP.