The equal-weighted ETF was launched in April 2003 and charges an expense ratio of 0.4%.
RSP has a 10-year annualized return of 9.5% versus 7.3% for the S&P 500.
“Investors often focus on individual stocks rather than the behavior of the portfolio in aggregate. While, technically, the fund owns mostly large-cap stocks, by equal-weighting them, the portfolio behaves more like a mid-cap fund, with a greater beta and volatility than a large-cap fund. Thus, this fund should really be compared with a mid-cap fund and that exposure can be obtained more cheaply,” Rawson said.
“In addition, there may be a slight improvement in return resulting from the strategy’s need to periodically rebalance by selling recent winners and buying recent losers, which results in a forced buy low/sell high approach,” he added.
Guggenheim S&P 500 Equal Weight
Full disclosure: Tom Lydon’s clients own SPY and RSP.
