The S&P 500 has endured a tumultuous year that bottomed with the late-summer sell-off but has rallied of late back toward its record-highs. ETFs that track the index have of course risen back with the index, but depending on the methodology they use to track it, results are varying widely – and that’s a bit concerning.

Exchange traded funds are most commonly passively managed, meaning they track an index using a certain set of rules and weightings. The S&P 500 is one of the most commonly tracked indexes in the world and the SPDR S&P 500 ETF (NYSEarca: SPY) uses the sames weightings as the S&P itself. However, when you compare SPY to the Guggenheim Equal S&P Weight ETF (NYSEarca: RSP) that tracks the same index, but weights its holdings equally instead of by market capitalization, you see a divergence.

Looking at Spy (blue line) & RSP (red line) movement over the last month shows that most of the time their spread is negligible but has widened over the past few weeks. Why is that? Well, since SPY is market-cap weighted its enjoying the advantage of top-heavy performance to carry it higher than its equal-weighted cousin.

And why does that matter? A Seeking Alpha analysis asserts, “…that’s a big issue. If you dig a little deeper into the numbers, less than half of the stocks in the S&P 500 Index are above their 200-day moving average. That number started the year at around 75% and was as high as 90% a few years ago”.

The narrow scope of the rally and companies enjoying positive trends means the entire positive price movement is fragile. This brings the current rebound’s solidity into questions, the SA article goes on, “Essentially, investors appear to be relying on a relatively limited set of companies for their investments (that’s lemming-like behavior). If those stocks start to crack, there could be a swift downdraft in the broader index (as the lemmings run off the cliff).”

Of course, the large-cap growth companies who have been lifting the S&P 500 may continue to muscle the benchmark higher or the historically strong fourth quarter may lift the struggling stocks in the index. The divergence is just a data point to consider, but one that is most certainly worth monitoring.