Equal-Weight RSP Lags S&P 500 in March, Maintains TTM Lead

The S&P 500 Equal Weight Index lagged its cap-weighted parent S&P 500 in March for the second consecutive month but maintains its trailing 12-month lead.

March was characterized by high volatility and concerns for the global economy. Equal weight lagged after U.S. large-caps had their strongest start to the year since 2019, and the second-strongest first quarter in the past decade. High beta and growth led among factors, while defensive strategies lagged.

A risk-off sentiment temporarily emerged in March from the collapse of Silicon Valley Bank, Signature Bank, and Credit Suisse, but markets stabilized and rebounded as U.S. large-caps remained well positioned amid the chaos.

According to S&P Dow Jones Indices, most of the S&P 500’s first quarter gains were concentrated in just a handful of large names; the top 10 contributors were responsible for 90% of the benchmark’s gains, with the triumvirate of Apple, Microsoft, and Nvidia contributing over 50%.

In March, the S&P 500 climbed 3.7% while equal weight slipped 0.9%. Year-to-date, the parent S&P 500 is now outpacing equal weight, with the S&P 500 up 7.5% and equal weight up 2.9%. Equal weight still maintains its trailing 12-month lead by 142 basis points.

Both the S&P 500 Equal Weight Index and the S&P 500 slipped in February, declining 3.3% and 2.4%, respectively. In January, the S&P 500 EWI gained 7.4%, outperforming the S&P 500, which gained 6.3% during the month, its best January performance since 2019.

The Invesco S&P 500® Equal Weight ETF (RSP) offers exposure to the S&P 500 EWI. RSP has historically demonstrated strong returns and introduces the small size and value factors to a portfolio, making it uniquely well positioned in the current environment.

The Invesco ESG S&P 500 Equal Weight ETF (RSPE) offers the same methodology as RSP, but screens for ESG criteria. Equal-weighted strategies can provide diversification benefits and reduce concentration risk by weighting each constituent company equally so that a small group of companies does not have an outsized impact on the index.

 

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