Open the holdings of iShares Core S&P 500, the largest S&P 500 fund sold in Europe, and the first ten lines add up to 38% of it. NVIDIA alone is close to 8%, Apple 7%, Microsoft nearly 6%. Sooner or later every European investing forum gets the same question: if a few tech companies are carrying my whole portfolio, shouldn't I just buy the equal-weight version?
The equal-weight S&P 500 holds the same five hundred companies but gives each the same slice, about 0.2%, and resets them to that every quarter. NVIDIA gets the same weight as International Paper. On paper it looks like the cautious choice. Once you look at what it has done and what it actually owns, it's less a hedge than a bet of its own: on smaller companies, on the duller sectors, and against whatever has gone up the most.
S&P 500 Equal Weight ETFs
15 funds.15 funds, cheapest 8 shown.
Showing all 15 funds
See the full comparison →Twenty years ahead, then the lead was gone
The longest record here belongs to RSP, the American fund that has tracked the equal-weight index since 2003. Our recorded USD fund-price series begins on 1 May 2003. From that date to 30 December 2022, RSP rose 647% while SPY, the ordinary S&P 500 fund, rose 508%. These comparisons use the historical prices in our data. We have not independently verified their dividend adjustments, so they are indicative fund comparisons rather than exact index total returns.
Then came 2023. From 30 December 2022 to 8 October 2026, the same USD series rose 59% for RSP and 112% for SPY. By 1 July 2024, SPY had caught up over our whole series since May 2003. The funds swapped the lead back and forth after that, and at the time of writing SPY is ahead again. Twenty years of outperformance, gone in about eighteen months.
Measured in euros the story is the same. Xtrackers' fund, launched in 2014, is the oldest UCITS fund on this index and still the largest, at over 11 billion euros. Here it is against iShares Core S&P 500, both accumulating and both priced on Xetra:
| Year | Equal weight | S&P 500 | Difference |
|---|---|---|---|
| 2015 | +8.1% | +12.5% | −4.4 |
| 2016 | +17.6% | +14.8% | +2.8 |
| 2017 | +4.0% | +6.7% | −2.7 |
| 2018 | −4.5% | −1.0% | −3.5 |
| 2019 | +31.3% | +34.5% | −3.2 |
| 2020 | +1.2% | +6.8% | −5.6 |
| 2021 | +41.6% | +40.7% | +0.9 |
| 2022 | −6.9% | −14.3% | +7.4 |
| 2023 | +10.1% | +22.5% | −12.4 |
| 2024 | +18.7% | +32.3% | −13.6 |
| 2025 | −0.5% | +4.7% | −5.2 |
| 2026 to 9 Oct | +16.5% | +19.3% | −2.8 |
Over the ten years to 9 October 2026, 10,000 EUR in the equal-weight fund grew to about 29,400 EUR. The same money in the ordinary fund grew to about 41,300 EUR.
Look at where that gap came from. In most years the two finished within a few points of each other. Two years, 2023 and 2024, did nearly all the damage, and those were exactly the years a handful of giant tech companies did most of the market's work. The one year equal weight really earned its place was 2022, when those same companies fell hardest and it lost less than half as much.
What you're actually buying
Equal weight doesn't just shrink the giants. It changes the shape of the whole fund. Using SPY's full holdings list from June 2026 and our own sector classification, this is how the two compare. The equal-weight column is what each sector gets on the day of a rebalance, one five-hundredth per company. In between, it drifts.
| Sector | S&P 500 | Equal weight |
|---|---|---|
| Technology | 38% | 17% |
| Financial services | 12% | 14% |
| Communication services | 10% | 5% |
| Consumer cyclical | 10% | 11% |
| Healthcare | 9% | 12% |
| Industrials | 8% | 15% |
| Consumer defensive | 5% | 7% |
| Utilities | 2% | 6% |
| Real estate | 2% | 6% |
| Energy | 3% | 4% |
| Basic materials | 2% | 4% |
The typical company you own also gets a lot smaller. In the ordinary index more than a third of your money sits in the eleven companies worth over a trillion dollars. In equal weight those eleven get about 2% between them, and nearly three quarters of the money goes to companies worth between ten and a hundred billion, because that is what most of the five hundred are. So you end up leaning towards smaller and cheaper companies, the size and value tilts that factor investors pay for on purpose. Nothing wrong with that. It is a choice, though, and it's why equal weight behaves like a strategy of its own rather than a safer copy of the S&P 500.
The quarterly reset is the strategy
Every three months the index sells whatever has gone up and buys whatever has gone down, back to equal slices. That one rule explains both the twenty good years and the bad ones. When market leadership rotates, trimming the winners pays, and that is part of how it got twenty years ahead. When the same few companies keep winning year after year, it keeps selling them too early.
The trading also costs something that never shows up in the fee. A normal index fund hardly needs to trade: when NVIDIA rises, its weight rises with it on its own. An equal-weight fund has to sell part of everything that went up and buy part of everything that went down, four times a year. With shares this liquid the cost of each round is small, but it comes out of your return every quarter you hold the fund.
The fee is the small part
The two big UCITS funds, from Xtrackers and iShares, both charge 0.15% a year. That is about double the 0.07% of iShares Core S&P 500, and five times the plain S&P 500 trackers at the top of the cheapest S&P 500 ETFs, which charge 0.03%. In money, that is 8 to 12 euros a year for every ten thousand you hold. Put that next to the table above and it is obvious the fee isn't what decides this.
The 0.12% funds at the top of the ranking are all swap-based and all new. In October 2026 Amundi's held about 100 million euros and the Xtrackers and UBS swap versions under 30 million each, which matters, because small funds are the ones that get merged or closed. Of the swap funds, only Invesco's, at 0.20%, has reached a billion.
There is still a reason to look at them. Equal weight leans towards companies that pay out more, so it yields about 1.5% a year against roughly 1.0% for the ordinary index. A physical Irish fund loses 15% of those dividends to US withholding tax, which comes to about 0.2% a year here, more than the fund's own fee. A swap fund is paid the index return before that tax; the S&P 500 piece above explains how, and what you give up for it.
So far the difference hasn't shown up in prices. From April 2025 to early October 2026, Invesco's swap fund and the physical Xtrackers and iShares funds all returned between 20.8% and 20.9% on Xetra. Eighteen months is too short to settle it, and closing prices are noisy, but it is a good reminder that arithmetic on paper and the return you get are not the same thing.
A few rows near the bottom are currency-hedged classes, in euros, pounds or Swiss francs, at 0.17% to 0.30%. A hedged class strips out the swings in the dollar, and the companies inside are exactly the same. In 2017 and again in 2025 the dollar moved a euro investor's result by more than ten points, so it isn't nothing, but most long-term holders simply accept it as part of owning American shares.
So should you own it?
If what bothers you is that NVIDIA, Apple and Microsoft are a fifth of your S&P 500 fund, equal weight does fix that. Be clear about what it fixes it with: more industrials, utilities and smaller companies, a rule that trades against momentum every quarter, and a fund that trailed the ordinary index in 2023, 2024, 2025 and so far in 2026. Anyone who switched at the start of 2023 for exactly this reason is still a long way behind.
The honest case for it is that it behaves differently, not that it will earn more. By construction it suffers less whenever the biggest companies are the ones falling, which is what happened in 2022. That is the case for holding it as a slice next to an ordinary S&P 500 or world fund rather than instead of one. And if you'd rather not take a view on company size at all, a world fund already dilutes the American giants, though by less than people expect, since about seventy per cent of MSCI World is American. Our ranking of the cheapest MSCI World ETFs covers that route, including why a fund's domicile matters more there than its fee.
Where to go from here
The table at the top rebuilds itself whenever a fund launches, closes or cuts its fee, so it will stay right long after the return figures in this piece have aged. Click any fund in it to see what it holds and where you can trade it.