Why ‘equal weight’ S&P 500 funds are having a moment—and are up almost 16% this year alone

If you have part of your portfolio in an S&P 500 index fund, you’re probably patting yourself on the back for the 12%-plus performance you’ve already notched this year.

But you could have done even better.

A less flashy corner of the index-fund world treats Nvidia and a random mid-cap industrial stock as equals.

It is beating the market by a wide margin.

The Invesco S&P 500 Equal Weight ETF (RSP) is up 15.95% year to date through Aug.

26, compared with 12.37% for the iShares Core S&P 500 ETF (IVV)—a nearly 3.58 percentage-point gap that has put equal weighting back in the spotlight.

That outperformance just reached a milestone of its own: RSP crossed $100 billion in assets under management for the first time on Aug.

19, capping a run that has seen the fund pull in more than $12 billion in net inflows in 2026 alone.

Why equal weight funds are beating the market The mechanics explain the divergence.

A market-cap-weighted fund like IVV gives its largest constituents, such as Nvidia, Microsoft , Apple , and Amazon , outsized influence because they represent an outsized share of the index.

RSP instead assigns each of the 500 companies roughly the same weight at each quarterly rebalance, muting the influence of any single giant.

That structural difference matters in 2026, Brendan McCann, senior associate manager research analyst at Morningstar, told Fortune .

He pointed to underperformance among several of the market’s largest names as the key swing factor: “Several of the big names in the market, like Microsoft, Nvidia, and Apple, have underperformed the broader technology market.

Since RSP underweights those companies, its performance is more insulated when those stocks underperform.” The flip side has reinforced the trend.