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.

 

For more news, information, and analysis, visit the Portfolio Strategies Channel.

Read more on ETFtrends.com.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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