Equal-weight funds are gaining attention for their ability to mitigate risks associated with stock concentration. By distributing investments evenly across their constituents, these funds have shown resilience compared to traditional large-cap index funds. Notably, Invesco’s S&P 500 Equal Weight ETF (RSP) recorded a return of -1.23%, while the S&P 500 Index faced a decline of -5.13% this year.
Invesco Launches QQQ Equal Weight ETF
Invesco recently expanded its equal-weight fund offerings by launching the Invesco QQQ Equal Weight ETF (QEW), which tracks the Nasdaq 100. Paul Schroeder, QQQ product strategist at Invesco, stated that the timing coincided with strong performance of equal-weight products this year, making it an opportune moment for the launch.
Fund Allocation and Performance
The QEW ETF consists of 100 stocks, each receiving a 1% allocation. This structure may lead to more frequent trading for rebalancing compared to market-cap weighted funds. Currently, while the Nasdaq 100 has declined approximately 5% in 2026, the Nasdaq Equal Weight Index has fared better, down about 3.6%.
Performance Comparisons
- iShares S&P 500 3% Capped ETF (TOPC): -3.8% YTD
- S&P 500 Index: -5% YTD
- Invesco S&P 500 Equal Weight Technology ETF (RSPT): Nearly flat
- S&P 500 Information Technology Index: -8.5%
- Invesco S&P 500 Equal Weight Energy ETF (RSPG): +31% YTD
- S&P 500 Energy Index: +29% YTD
- Invesco Russell 1000 Equal Weight ETF (EQAL): +1% YTD
- Russell 1000 Index: -5% YTD
Advantages of Equal-Weighting
Equal-weighting provides a tilt towards smaller and mid-cap companies, which often outperform during bull markets for small-cap stocks. Aniket Ullal, head of ETF research at CFRA, emphasized that an equal-weighted QQQ is ideal for investors seeking exposure to a tech-focused ETF while avoiding significant investments in megacap stocks.
