RSP ETF Beating VOO, SPY as S&P 500 Equal Weight Fund Nears $100 Billion Milestone

The Invesco S&P 500 Equal Weight ETF (NYSE: RSP) has outperformed this year, attracting strong investor inflows while beating popular peers such as the Vanguard S&P 500 ETF (NYSE: VOO) and the SPDR S&P 500 ETF Trust (NYSE: SPY). The RSP ETF has delivered a total return of 13.1% year-to-date, compared with about 10% for both VOO and SPY. RSP ETF is Nearing a $100 Billion Milestone ETF Db data shows that the RSP ETF has added over $12.2 billion in assets this year. Together with its performance, it is now nearing the $100 billion assets under management (AUM) milestone. It has over $98.5 billion in AUM, much higher than what it had last year. RSP is a unique fund in that it tracks all the companies in the S&P 500 Index, with the main difference being that they all have an equal weight. As a result, this weighting means that its exposure is tilted towards smaller companies in the index. Unlike RSP, VOO and SPY are market-cap-weighted, meaning larger companies carry greater influence over their performance. Mega-cap stocks such as Nvidia (NASDAQ: NVDA), Apple (NASDAQ: AAPL), Alphabet (NASDAQ: GOOGL), and Microsoft (NASDAQ: MSFT) dominate their portfolios, with the top 10 holdings representing roughly 37% of each fund’s total weighting. Read Also: SpaceX First Earnings After IPO Are Here: How Is the Options Market Positioning? Top Magnificent 7 Stocks Have Underperformed the Market This Year RSP has beaten the VOO and SPY ETFs this year because of the ongoing performance of the Magnificent 7 companies. Nvidia, despite its role in the AI space, has dropped by over 15% from the year-to-date high. Tesla has dropped by 37%, Alphabet by 11%, while Microsoft has dropped by 17%. On the other hand, small-cap companies have done relatively well this year. The popular IShares Russell 2000 ETF (NYSE: IWM) has jumped by over 18% this year as investors have rotated to smaller companies. The RSP ETF also trades at a more attractive valuation than VOO and SPY. It has a forward price-to-earnings (P/E) ratio of 16.9, compared with about 20 for both VOO and SPY, suggesting that investors are paying less for each dollar of expected earnings. Still, historically, the market cap-weighted funds have done better than the equal-weight one. For example, VOO and SPY have had a total return of 83% in the last five years compared to RSP’s 53%. Read Also: Goldman Sachs' GPIX, GPIQ Beat JPMorgan's JEPI, JEPQ in Key Metrics Image: Shutterstock