RSP - RSP: I Firmly Believe In An Allocation To Equal-Weight At This Juncture

2024-02-20 23:53:46 ET

Summary

• The article evaluates the Invesco S&P 500 Equal Weight ETF as an investment option at its current market price.
• RSP has under-performed the market-cap version of the S&P 500, but I believe this builds on the case for buying/owning this product given how concentrated market-cap S&P 500 ETFs have become.
• The performance gap between RSP and the S&P 500 has become extreme, signaling a reversion to the mean is likely to happen.

Main Thesis & Background

The purpose of this article is to evaluate the Invesco S&P 500 Equal Weight ETF ( RSP ) as an investment option at its current market price. This is an alternative play on the S&P 500, given that most ETFs track an index that is weighted by market cap. By contrast, RSP utilizes an equal weight strategy for the stocks in the S&P 500 index, with quarterly re-balancing....

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