The Invesco S&P 500® Equal Weight ETF (RSP) is maintaining its role as a favored core equity holding in 2022, hauling in nearing $2 billion in net flows year to date.
RSP has seen $1.8 billion in net flows year to date and $571 million month to date as of January 21, according to ETF Database. The fund has $37 billion in assets under management, making it the largest equal weight ETF available to investors.
Launched in 2003, RSP has garnered massive attention among the investor community in the past few years. The fund took in $5.2 billion last year after seeing $7.8 billion in flows in 2021. In 2020, RSP accreted $684 million in assets, and in 2019, saw just $49 million in net flows.
RSP tracks the S&P 500 Equal Weight Index, which includes all constituents in the S&P 500 but gives them equal weights at each quarterly rebalance. The Invesco ESG S&P 500 Equal Weight ETF (RSPE) offers the same methodology as RSP but implements a screen for ESG criteria.
The equal weight index has outpaced its cap-weighted parent consistently over the past year. The S&P 500 Equal Weight Index gained 7.4% in January, outperforming the S&P 500, which gained 6.3% during the month.
In 2022, the S&P 500 declined -18.1% in 2022 compared to RSP’s decline of -11.6%, each on a total return basis. While the S&P 500 EWI consistently outperformed last year, the gap between RSP and the S&P 500 widened substantially during the fourth quarter.
Equal weight’s methodology of selling relative winners and buying relative losers adds factor tilts to a portfolio. As of the end of the third quarter, the S&P 500 Equal Weight Index tilts towards small size (47.8%), value (33.4%), and dividend (15.6%) compared to the S&P 500. It also has a tilt away from quality (-23.7%), low volatility (-6.0%), high beta (-4.5%), and momentum (-3.1%), according to S&P Dow Jones Indexes.
For more news, information, and analysis, visit the Portfolio Strategies Channel.